Tag: 401k rollover

3 Ways To Make This The Best Holiday Season

Make This Your Best Holiday Season Yet

The halls are decked, the chestnuts are roasting, and the silver bells are jingling. But many folks still feel like they’re getting a lump of coal for the holidays this year. If adjusting your celebrations to the pandemic has left you short of holiday cheer, remember that different doesn’t have to mean bad. Focus on these three ideas and you might even find new ways to take some stress out of the holidays, spend time with loved ones safely, and build new traditions that will last for years to come. Here are 3 ways to make this the best holiday season.

  1. Take care of yourself.

Many of the conveniences we’ve grown accustomed to during the pandemic can make the holidays easier to plan for and manage — while also limiting your risk of getting sick. Your favorite local retailers are probably offering online shopping and curbside pickup. You could support a local restaurant by ordering a precooked holiday meal or mailing their signature pies to your family as gifts. But if you do shop in person, remember that your Santa beard, while festive, isn’t a good substitute for a face mask.

Speaking of buying gifts, make sure you take care of your finances as well. Sit down with your spouse to make a list of loved ones to whom you want to send gifts and then decide how much you want to spend per person. A good holiday budget will limit spur-of-the-moment purchases and keep you off your credit card company’s naughty list.

As for the 3,000 calories a typical holiday meal can contain, try to limit your portions, especially if you have underlying health conditions and haven’t been as active as you usually are during the pandemic.

  1. Gather responsibly.

According to the CDC, “The safest way to celebrate winter holidays is to celebrate at home with the people who live with you.” If you do decide to host or attend a party with people outside of your household, try to utilize larger rooms with good ventilation where families can create their own six-foot bubbles. Yes, “ventilation” means opening doors and windows to circulate some fresh winter air, so you might need to wear your coat along with your face mask.

It’s also worth reconsidering some holiday traditions this year. Buffet-style meals that everyone shares are more likely to spread germs than serving pre-portioned plates or having all guests bring their own food. Step outside to sing holiday songs so that you all aren’t breathing and re-breathing the same air. And if you or anyone in your household isn’t feeling well, make the tough choice and isolate to keep your loved ones safe.

  1. Focus on what is important in the long term.

Altering holiday plans will be painful after a year in which we’ve already sacrificed so much. Each family will have to make its own decisions about the safest and most financially responsible ways to celebrate under these challenging circumstances. But even if this year’s holidays won’t be as perfect as years past, you and your loved ones still have so much to be grateful for. Your decorations are still glowing. The fresh-baked cookies are still warm. And your family, near and far, have made it through one of the toughest years on record together.

Focus your energy on celebrating those good things now and start planning for the good things you’ll celebrate once you and all of your loved ones are together again. Talk about the things you want to do, the places you want to visit, the special events you want to make up for missing. Your family could look back on 2020 as the year when you all came together at the holiday season – even though you were apart – and planned for a 2021 that you’ll treasure forever.

All of us here wish you and your family a safe and fulfilling holiday season. We look forward to helping you make 2021 as merry and bright as possible. When you need us, we will be there.

 

Elections Matter But Life Transitions Are More Important

Many folks are feeling as much anxiety about the end of this contentious presidential election as they were feeling during the long months of campaigning. It’s impossible to predict with 100% accuracy what a new president and a new Congress are going to do. That feeling of uncertainty can send out ripples through our financial and political systems until we get a clearer picture of the agenda for the next four years.

As important as elections are, we believe that a solid financial plan gives you the tools to keep improving your Return on Life no matter what’s happening with our nation’s politics. Instead of fretting about what may or may not happen starting in January, try to focus on these three areas of your life that will help you control major transitions.

  1. You can’t control the economy … but you can control your career.

Elections sometimes spark short-term volatility in the financial markets. But the economy is bigger than any one president, especially while Covid-19 continues to change everyday life and  global business.

As companies continue to adapt to the pandemic landscape, job opportunities are becoming less centralized and more diverse. You might be able to take your dream job on the other side of the country without leaving the home your family loves. Or you might spot an emerging market in the middle of all this displacement where you can open your own company.

  1. You can’t control taxes … but you can control your saving and spending. 

Presidential candidates talk a lot about their tax plans on the campaign trail. The need for Congress’ cooperation to put that plan into action usually isn’t discussed quite as much.

Whether your preferred candidate won or lost, there’s no guarantee that your taxes are going up or down. But you can anticipate when your kids will be going to college, if you’ll need to replace the family car soon, or if you want to move to a beachfront condo when you retire.

Your tax rates will play a role in handling these transitions. But your levels of saving and spending have a bigger impact on your financial plan than any other factor. If you’ve never kept a monthly budget before, make 2021 the year that you start. Sit down with your spouse and weed out all those recurring subscriptions and memberships you’re not using. Make a weekly meal plan so you’re not eating out so often. The couple hundred dollars you economize every month could grow into a comfortable padding for your nest egg over time.  

  1. You can’t control who’s president … but you can take control of your financial plan. 

Per the clamor on social media, was this really “the most important election of our lifetimes?” It could be decades before we have enough perspective to judge. But as far as your financial planning goes, here’s another way to think about presidents:

A 67-year-old baby boomer eyeing retirement might have taken her first part-time job when Lyndon Johnson was president. As of 2020, that senior has lived and worked through ten different presidents.

It’s very doubtful that you’re going to love every single president who serves during your career. Yes, certain things that each one does might move the needle on your retirement accounts in the short term. But it’s folks who stick to their plans and continue to save and invest regardless of what’s happening in the outside world who build long-term wealth.

No matter how you feel about the election, you can take action today to keep your financial plan on track. Get in touch and we’ll schedule an appointment to start planning for 2021 and beyond.

Election Resources

 

Navigating Life’s Transitions

Navigating Life’s Transitions By Rewriting Your Story

Your plans for the future are really a story that you tell yourself. Some of the chapters are easy to imagine and plan, like buying your first home, sending your kids to college, or picking out dream retirement destinations with your spouse. But life has a way of throwing unexpected plot twists at you, such as, say, a global pandemic that upends how you live and work. If you feel like your story has lost some of its most important plot threads, use this three-step method to find a new happy ending and navigate life’s transitions.

  1. Accept

An unexpected job loss. The death of a loved one. Losing your home in a fire. A major illness.

Life is never the same after you experience these kinds of unexpected transitions. Your lifestyle might change. Perhaps your relationships might change. Your daily routine might change. And your long-term personal, professional, and financial goals might have to change as well.

Letting in feelings like sadness, embarrassment, and fear can be very challenging. If you’re having trouble expressing yourself to your spouse or another confidant, try journaling. Getting your thoughts and emotions down on paper can help open you up for the conversations you’re going to need to have as you navigate through this new transition.

  1. Edit

Now that you’ve accepted this change in your life, you need to figure out how you’re going to adapt to it. Big transitions often feel so overwhelming that they can be paralyzing. Where do you start?

Start with today.

Break the new transition down into smaller parts. What is one thing on your list that you can accomplish today and that you can build on tomorrow? If your doctor says you have to start eating better, make a new shopping list. Need to exercise more? Buy a pair of running shoes. Brush up your resume so you can start a job hunt. Register for an online class that will help you make a career change. If it’s time to tighten the family belt, cancel that streaming subscription you never use.

Racking up smaller daily wins will make this new transition feel a little more manageable every single day. You might also create some new habits that will make you healthier, happier, and more productive.

  1. Rewrite

In the moment, unexpected transitions can feel like an end. But as you gain personal momentum from your new routine, you’ll start to see that there are opportunities ahead of you as well. And when you finally close this chapter, you can start writing a new one.

Some of the details in this revised chapter might be a little different than you imagined before. But not all change is bad. Maybe, instead of retiring to that beachfront condo, you remodel the family home and have your grandkids over more often. If you have to hang up your tennis racket, taking long walks with your spouse could be a new way to exercise, unwind, and spend time together. Now that one phase of your career is over, it might be time to promote yourself to CEO of your own company.

If you’re really struggling to see a way through an unexpected transition, here’s an easy daily win to get you started: get in touch with us. We can review your $Lifeline in-person or over a video chat to figure out if any of your anticipated transitions need to be edited. We can also coordinate with other professionals like your attorney or accountant to iron out any other major adjustments you might need to make.

No matter how your life story continues to change, we’re here to help you make the next chapter the best one yet.

You can also find some great resources for transition on the AARP website.

Use a Lifetime of Skills to Give Back During Retirement

The professional skills you’ve honed during your career are still incredibly valuable even though you’re retired. Rarely has there been a greater need for talented and dedicated people with a wide variety of skills to pitch in and give back in retirement to their communities. But giving back is also good for you. Many studies link volunteer work to increased longevity and improved mental health for seniors.

Discuss these three questions with your spouse to help decide what kind of volunteer position could be right for you.

  1. What skills do you have to give back?

Charitable organizations have many of the same needs that for-profit companies do, including office management, event planning, accounting, data entry, graphic design, IT, and team building.

However, these organizations can also benefit from skills that you might take for granted. With a little training you could become a tutor, helping students of all ages master basic reading or mathematics. If you’re good at wrangling kids, you could help at an after school program. If you’re good at wrangling adults, you could help your charity of choice organize groups of volunteers during large events like fund drives.

One word of caution to seniors who ended their careers in the C-suite: not being the boss can take some getting used to. Remember that volunteer organizations have developed best practices that they know will help them achieve their objectives while also keeping everyone safe. Knowing when to tap into your executive experience and when to dig in with the rest of the volunteers is just another part of retirement you’ll need to adjust to.

  1. How much time should you commit?

One benefit of taking on a volunteer position is that it can help fill some of the hours that you used to spend working. Many seniors find that having places to be and things to do adds more structure and meaning to their days, especially when they’re giving back.

Designing the perfect retirement schedule is often a process of trial and error, especially if you’re married. As you and your spouse adjust to spending more time together, you’ll also explore ways to spend time apart. If you’re enthusiastic about volunteering, you might be tempted to jump in with both feet. But early in your retirement, building a little flexibility into your schedule might be best. After all, volunteer work is still work. In some cases, volunteering might even be more physically and emotionally demanding than your old job. Make sure you’re still leaving yourself time to unwind, bond with your spouse, play some golf, and progress through that list of great books you want to read.

  1. What causes are closest to your heart?

Your retirement was already going to be very different than your parents’ or grandparents’. Today’s retirees are healthier, more active, and living longer than previous generations of seniors. Thanks to technology and new media, you’re also more connected to the wider world.

But you’re also retiring at a truly historical moment. The combination of the Covid-19 pandemic, economic struggles, and social unrest in American cities has created many needs. Your abilities and your passion have never been more valuable to charitable organizations, non-profits, schools, churches, and civic groups.

Again, you may feel compelled to start to give back as much as you can, right away. But take some time to find the best match between your skills. Your experience, your interests, and what your community needs are most important. The better that fit is, the more rewarding your volunteer work – and your retirement – will be.

If you’re wondering how to integrate a volunteer position into your retirement, we have a new tool that might help. Give us a call and we can work through your Ideal Week in Retirement exercise together.

 

 

 

 

 

 

Gain Personal Momentum Coming Out of the Pandemic

Part 1: Better Habits for a Healthier Mind 

Since the Covid-19 outbreak we’ve all had to make adjustments so that we could cover our basic needs, care for our loved ones, and remain productive during quarantine. No matter how well you’ve adapted to these extraordinary circumstances, there’s probably a part of you that feels like you’ve been just trying to get through the next day. But it’s important that we create some personal momentum as life returns to normal, so we can hit the ground running.

And, to your credit, you have!

But as the country begins to reopen, it’s time to stop “getting by” and start approaching our lives and work with the same vigor we had before the pandemic. Regaining our old momentum isn’t going to be as easy as flipping a switch. So we asked some leading experts on behavior and peak performance what mental strategies they would recommend to help us start building personal momentum as we approach, hopefully, the end of quarantine life. 

  1. Live in your “Present Box.”

Licensed clinical psychologist Dr. Beth Kurland says that evolution instilled a “wandering mind” in humans as a survival mechanism. We’re never totally in the present because our survival instinct is constantly reminding us of things we overcame in the past and alerting us to potential future dangers. Dr. Kurland says, “In this pandemic of uncertainty, these kinds of mental ruminations can really increase a lot of the anxiety that people are experiencing.”

The more that we focus on the here and now, the less anxious we are going to be, and the more motivated we will feel to tackle immediate problems. To help achieve this mental shift, Dr. Kurland recommends drawing two large boxes on a sheet of paper. Label one “The Present,” and label the other “What If?” Then, write the things that are occupying your mind in the appropriate box. According to Dr. Kurland, separating what’s happening right now from what could happen helps us “to really think about what is in our sphere of influence, what we have personal agency and control over.”

Yes, eventually, you might have to move some of those “What Ifs?” into your “Present” box. But for the moment, try to imagine putting a lid on your “What Ifs?” and structure your time around what you need to do – and can do – today.

  1. More Teflon, less Velcro.

Psychologist Rick Hanson says, “The mind is like Velcro for negative experiences and Teflon for positive ones.” The anxiety and worry we’re all experiencing during quarantine only enhances our tendency to dwell on the negative and overlook the many good things we have in our lives.

Dr. Kurland believes that an added benefit of her Two Boxes exercise is that the more present we are, the more likely we are to notice and appreciate the positive. For example, many of us are feeling closer to our extended friends and families thanks to Zoom calls and care packages. Other folks have used the working from home experience to chart new career paths.

However, a Teflon mindset doesn’t mean boxing away some of the real emotional hardships you’ve experienced during the pandemic. Instead, Dr. Kurland encourages us to find a healthy balance between letting our feelings in and not letting them keep us down.

“I think it’s really important to acknowledge and have an opportunity to process those emotions,” Dr. Kurland says. “But try to both hold a space for the grief, the sadness that may be there, and also really find ways to notice the moments where we can really appreciate the positive things that we can take in. The warm glance from a family member or a kind word from a coworker. These kinds of things that really, as we take them in, can help us to get through a difficult day, a difficult moment.”

  1. Separate good stress from bad stress.

“Stress is good to a certain extent,” says Commander David Sears, who served for 20 years in active duty within the United States Special Operations Command as a U.S. Navy SEAL officer. In Commander Sears’ experience, stress can be a catalyst for growth and improvement. Right now stress is instilling good new habits in you, such as wearing a mask when you go shopping or retooling your monthly budget to adjust for changes in your work and living conditions.

But Commander Sears cautions, “You can get overwhelmed by stress and then it starts to become chronic, debilitating and it turns into a sort of pain.” To manage his own stress response, Commander Sears leans on lessons from his military service, including the importance of having a support system around you and finding order in a personal routine.

“It’s Physical Distancing”

“This whole idea of social distancing that we have is wrong,” says Commander Sears. “It’s physical distancing. We still need that social interaction, you need to have those communications. And you have to put in some structure in order to put some sanity into your life. Maybe develop your own schedule in the morning: I’m going to get up, I’m going to work out, I’m still going to put on my pants and get out of my pajamas. I’m going to then go to my first project of the day, then I’m going to go to the second. You might even need to implement a little more structure and discipline in your life in these times so you don’t feel like you’re wandering.”

We understand that transitioning back to living and working outside of your home is going to present its own set of challenges. We hope the expert strategies discussed here will help you approach those challenges from a more positive place. We’re also available for video calls or in-person meetings to discuss how your Life-Centered financial plan can help you build more momentum towards living your best possible life after quarantine.

If you would like to create personal momentum in your personal finances, reach out to us.

Additional Government Resources

Get Away In Your Own Backyard

Summer travel plans are up in the air right now as federal and local governments sort through the best strategies for keeping COVID-19 under control. Although it’s disappointing to put off a vacation or big family party you’ve been planning forever, there are still recreational options right in your backyard that will get your family outside safely. If you’re starting to reschedule your summer, keep these ideas in mind to make the most out of the months ahead.

Stay safe

No matter where you go or what you decide to do, social distancing is still Rule 1.

The CDC recommends that you and members of your household stay at least six feet away from other people, even in open air. If you visit a public park, avoid group activities or team sports like basketball, soccer, or football that put you in close contact with other people and shared equipment. Avoid public facilities like bathrooms and playgrounds. Hiking trails and taking bike rides are good alternatives.

Also, make sure you bring along a cloth face covering and some hand sanitizer, avoid touching your face, and wash up when you get home.

 Find a nearby National Park

According to the National Park Foundation, there are 62 sites in the U.S. that include “National Park” in their name, including such famous destinations as the Grand Canyon and Yellowstone.

But before you load up the camper, keep in mind that the CDC recommends staying close to home. Long-distance travel will require stops to refuel, eat, and use public restrooms, which could expose you and your family to germs – as well as spread your own.

Also, even though parks are technically “open,” many of their public facilities aren’t. That means no restrooms or cafeterias. Maintaining a safe social distance could also be challenging at more popular parks, especially as the weather turns warmer.

If the big parks are outside your radius, our wider National Park System spans 419 sites, including historical battlefields, monuments, nature trails, rivers, and preserves. Take a look at the National Park Foundation’s database. There’s probably an interesting, beautiful spot near you that you’ve never noticed before.

Explore local options

Many state and country parks are open as well, with many of the same restrictions in place. You can take a long walk or bike ride with members of your family, as long as you can maintain safe distance from other folks. But depending on your local health guidelines, playgrounds and public restrooms might still be off limits. Check state and county websites for more information about what facilities are available and plan ahead, especially if you’re bringing children along.

Kids are one reason that your local neighborhood park is still a great option for a day out; emergency bathroom breaks and snack time are a lot easier to manage when your house is just down the block. Neighborhood parks can also be less of a crowding hazard, making it easier for your family to maintain safe social distance.

Of course, that empty playground is more tempting in a small park too. Before you head outside, have an age-appropriate chat with your kids about why they need to stay off public equipment.

REALLY local options 

If your home has private yard space, wake up your inner child, especially if you have children of your own. Kids who see their parents really throwing themselves into family time are going to feel a little less anxious and sad about things they can’t do right now.

When you’re not working or teaching, leave your phone inside and make this family time special. Plan a treasure hunt. Lead a backyard yoga session. Organize a family soccer game. Plant flowers together. As the weather improves, move inside activities outside, like meals, story time, and board games.

Finally, use the space available to you to embrace some of the simplicity that this situation has created. Hang up a hammock or set up some extra reading chairs around the fire pit. One of the reasons we struggle to fill time during quarantine is that rushing through our normal lives makes us feel like we should always be doing something. Older children and adults should take advantage of extra downtime to think, reflect, and be creative.

We know summer travel is just one of many ways that the COVID-19 pandemic has disrupted your life. As our country and our local communities start to reopen, please be safe, and please be in touch if we can help in any way.

Use This Downtime To Think About Retirement

The coronavirus pandemic has forced many older workers to reassess their careers and how they view retirement. Folks who are fortunate enough to be working from home might be coping with a mix of technological hurdles, while also enjoying more family time and more flexible hours. Too many others nearing retirement are facing real financial worries due to reduced income, job loss, and instability in their investment accounts.

Under ideal circumstances, there are three broad choices about how to transition away from your full-time job: phased retirement, full retirement, and continuing to work in retirement. Let’s consider how the pandemic has affected each of these options and which path could be the most fulfilling for you.

Phased retirement.

Working from home during the pandemic might be giving some workers a small taste of what phased retirement is like. Reducing the hours that you’re in the office can help you ease into a new routine where you’ll be spending most of your time at home. You’ll also have some flexibility with your schedule, which will allow you and your spouse to start experimenting with shared and separate calendars that will let both of you get things done without driving each other crazy.

Moreover, the pandemic has forced all of us to reassess the people, experiences, and goals that mean the most. Phasing into retirement can help you fine-tune your work-life balance as you continue to process how social distancing has affected you professionally and personally.

Full retirement.

That same spirit of introspection is leading many seniors to think about jumping into full retirement sooner. Perhaps being away from your job is making you realize you’re too used to doing unfulfilling work for a paycheck that’s not making your life better. Or, if you’ve been putting off retirement, the experience of social distancing might have motivated you to stop waiting and start doing as soon as life gets back to normal.

Social distancing has created a separation between our sense of self and our jobs that some people find a little unnerving. That feeling is very common among new full retirees, even those who are following a long-established plan and retiring wholly on their terms. If you’re leaning towards a full retirement right now, talk to your spouse about how you’d like to reframe your identity and start living a freer and more fulfilling life after work.

Working While Retired.

Even before the coronavirus pandemic, more and more seniors were choosing to work after retiring. Today’s retirees are healthier and more active. Some are working past 65 because they love what they do. Others transition to part-time jobs that let them explore other interests while still earning a paycheck. Many working retirees also want to top off their retirement and savings accounts while they’re still able so that their nest eggs keep pace with increased life expectancy.

Could the coronavirus pandemic accelerate this trend? While social distancing, many seniors have gained greater proficiency with technologies like Zoom, Skype and Slack. Those skills could open up a whole new world of remote jobs, including teaching and consulting positions. Entrepreneurial seniors might be looking at the shifting landscape of global business and spotting a new route for starting their own dream companies. And still other seniors might be so sick of being cooped up that, when conditions are safe, they’ll seek out part-time jobs as a way to reconnect with their communities.

If retirement is a transition you saw fast approaching on your $Lifeline at the beginning of the year, let’s talk about how the coronavirus has affected your thinking. We just revamped the $Lifeline tool so that it’s easier for you to plot out what you see coming next and sync those changes to your financial plan.

Whatever your approach to retirement may be, we can help you get there. Let’s start with a conversation.

Has the pandemic made Americans more or less confident about their retirement plans? Find out here.

We Plan For A Reason

We Plan for a Reason

 

We’re still in the early stages of understanding how the coronavirus outbreak will affect global health care and economics for the rest of the year, but it’s more important now than ever to stick to a plan. When we look at your most recent life plan, we can see events that we’ve been anticipating for quite some time: children heading off to college, home upgrades, family vacations, elder care for your parents, and, of course, your own retirement.

 

Here’s why guiding you and your family through these life transitions is still the central focus of our planning, even during a significant bout of market volatility.

 

  1. The big picture is always brighter.

 

Nobody could have predicted that a virus outbreak would disrupt global business right in the middle of a contentious presidential election cycle. But market history did tell us that the record-breaking bull market of 2009-2019 wasn’t going to last forever. What goes up eventually comes down.

 

The further you pull back when you’re looking at market returns, the smaller today’s volatility looks, especially in comparison to big life transitions plotted on a 30 or 40-year $Lifeline. Continuing to work towards those events we can see coming is a much more effective strategy than trying to predict the next natural disaster, the next market downturn, or the next president.

 

  1. You have options.

 

While major market volatility is never about just one thing, the coronavirus is making it hard for companies around the world to buy raw materials from China and sell to Chinese customers. Stocks in the energy, travel, technology, and consumer goods sectors have been hit especially hard.

 

Luckily, your portfolio is not overly invested in any one company or any one sector. Spreading out your assets across a wide variety of investments – including more stable bonds and cash savings – provides some options during volatility. Diversification gives us the means to scout for rebalancing opportunities when prices are low. It also provides reserves that we can tap if you need a little extra help weathering market fluctuations.

 

What’s going to guide the decisions we make during this market correction, and the next one? How are we going to decide which levers, if any, to pull, and which to leave alone?

 

  1. STICK TO THE PLAN.

 

We can’t plan for the next significant market shakeup. What we can do is use the tools at our disposal to keep you and your family on track to navigate your $Lifeline transitions and achieve your financial goals, no matter what’s going on outside of your home.

That’s why there’s no “one-size-fits-all” answer when folks wonder what they should do during a moment like this. The millennial who just started working and investing is at a very different point on his financial journey than the CEO eyeing retirement in the next five years. The couple planning to start their own business has different financial needs than the couple with three smart children all angling for Ivy League schools. And the retiree planning to golf her way across the country probably doesn’t have the same concerns as the retiree whose husband is experiencing ongoing health problems.

 

These scenarios all require their own unique, personalized plans. Some folks will make the most progress towards their goals by sticking to their current saving and investing strategies, even as the markets are unsettled. Others might need to increase allocations to their cash reserves. And still others might look for “buy low” opportunities that will pay off in the long run. In each case, the client’s $Lifeline is our guide, not today’s headlines.

 

We understand that volatility can be worrying, especially if you’re nearing retirement or newly retired. If you’d like to review your most recent plan and hear a little more about our current market perspective, make an appointment to visit our offices. Whether news is good, bad, or somewhere in between, you can rely on our Life-Centered Planning process to keep your best interests first and your life goals in perspective.

 

 

Will A Vacation Home Provide a Good Return on Life?

A vacation home can provide years of enjoyment and fond memories for multiple generations of your family. They can also create an extra layer of headaches and expenses that prove more trouble than they’re worth.

Here are 4 reasons to think twice before buying a vacation home, even if doing so won’t break the bank:

Full-time bills for part-time enjoyment.

Most workers receive around two weeks of vacation time from their employers. Self-employed “gig economy” workers or small business owners might manage to carve out a few extra days. Or, they might be so busy running their businesses that even a week of vacation time is a stretch.

Regardless, the bills associated with your second home are going to be there 52 weeks of the year: mortgage payments, electricity, basic upkeep, etc. Are you going to spend enough time at your vacation property to justify those costs?

“Landlord” is a job.

Many folks plan to offset the expense of a vacation home by renting it when they’re not using it. This can be an effective way to earn some extra money and make your mortgage payments without stressing your finances.

But when you rent out a property you own, you’re taking on a new job: landlord. That means vetting potential renters and dealing with any unruly folks who slip through your screening process. That means more wear-and-tear on the house, appliances, and furniture. That means repairs. That means complicated insurance and tax issues.

And all that means more work while you’re still working.

Maybe taking on that job appeals to you, especially if you’re retired and enjoy doing handiwork. But if you don’t want to add “landlord” to your resume, don’t use renting your vacation home to justify the purchase.

Visit more, travel less.

Buying something new is exciting, especially when it’s a big-ticket purchase like a vehicle or home. But that excitement can be surprisingly fleeting. Take your new sports car around the block a few times, and it’s suddenly just your car. Watch a few movies in your fancy home theatre, and suddenly it’s just your TV.

A vacation home could be an exception to that rule, especially if it becomes a focal point for family gatherings. In that case, what you’re really buying isn’t a home: it’s an experience of time shared with loved ones. The same holds true if your vacation home is near activities you and your spouse both enjoy, like a cluster of great golf courses or a vibrant restaurant scene.

But if your vacation home is just a nice house, that “getaway” feeling is going to become just another part of your regular routine. Vacationing will start to feel like visiting, or worse, like walking into another set of rooms in your house. When vacation time rolls around, it’s going to be hard to justify spending additional money on “bucket list” travel when you know your second house is just sitting there, racking up mortgage interest, waiting for you to replace the leaky water heater.

Retire TO, not FROM.

So: you don’t want to be a handyman, you dream of crisscrossing Europe, and vacationing for more than 10 days per year makes you antsy.

Still, there’s that voice in the back of your head saying, “We love that place. We have the money. If we don’t buy now, we never will.”

Why not?

Maybe buying a second house isn’t going to improve your Return on Life right now. But retiring to your favorite vacation destination could be an invigorating change of scenery. There’s a big difference between putting off your goals until it’s too late and putting a plan in place that will let you hit that goal when the time is right.

In the meantime, keep that favorite spot in your vacation rotation. Who knows? After a few more years, the shine might wear off and you’ll start dreaming about a new retirement home.

Ready to move but not sure where to go? Check out Money.com for the 8 best cities to retire in.

And as your plans evolve, make sure you keep us in the loop. Wherever you decide to settle down, our planning process can help you get there.

 

 

2019 Was One For The Ages | Heritage Wealth Weekly

About face!

2019 was a remarkable year for investors with many asset classes delivering positive performance. Both the Standard & Poor’s 500 Index, a gauge of U.S. stock market performance, and the Dow Jones Global (ex U.S.) Index delivered double-digit increases (see the below table). Bonds and gold rallied, too, delivering positive returns for the year.

Possibly the most important factor contributing to asset performance in 2019 was an ‘about face’ by the United States Federal Reserve. Axios reported:

“The Fed’s 180-degree turn was the story of 2019, asset managers and market analysts say…Chairman Jerome Powell and the U.S. central bank went from raising interest rates for a fourth time at the close of 2018 and giving market watchers the explicit expectation this would continue in 2019, to doing the opposite. The Fed cut rates thrice and even began re-padding its balance sheet in the last quarter of the year, bringing it back above $4 trillion.”

How Did Markets React to the Fed?

The Fed’s policy decision gave investment markets a boost, however, it did little to quell investors’ worries about potential recession and the impact of the U.S.-China trade war, reported The Wall Street Journal. As a result, investors moved money from U.S. stock markets into bonds and other investments they perceived to be safer throughout the year.

During the fourth quarter of 2019, U.S. markets delivered positive returns despite uncertainty about the strength of the U.S. economy created by inconsistent economic data. For example, the last jobs report of the year indicated unemployment remained near a 50-year low. Yet, in 2019, workers experienced the highest number of layoffs in a decade.

Many layoffs during the year were the result of corporate bankruptcies, especially in the retail sector. Investors who took time to evaluate the juxtaposition of unemployment levels and layoffs may have recognized disruptions in the retail sector has potential to create opportunities for investors.

How Do The Economic Indicators Look?

A closely watched indicator during 2019 was manufacturing. In December, Fox News reported, “The ISM Manufacturing Index fell for the fifth month in a row to 47.2 in December, down from November’s reading of 48.1. That’s the weakest reading since June 2009, when it hit 46.3, and well below the 49 reading that economists surveyed by Reuters expected.”

One of the reasons for weakness in manufacturing is the U.S.-China trade war. Late in the fourth quarter, concerns about trade subsided after the announcement of a phase one trade deal. The agreement is scheduled to be signed on January 15, 2020.

Continued progress in resolving the trade war could help boost economic growth in the United States. At the end of 2019, United States gross domestic product, the value of all goods and services produced in the country, was expected to remain slow and steady during 2020. However, forecasters at the Federal Reserve Bank of Philadelphia expected the economies of nine states to contract during the first six months of the new year.

From a geopolitical perspective, the 2020s are beginning just like the last decade did, with all eyes on Iran.

In 2009 and 2010, the Iranian Green Revolution captured the world’s attention as social media provided insight to post-election turbulence and unrest in Iran. Last week, the first of the new decade, all eyes were again on the Middle East as tensions between the United States and Iran flared after the death of a top Iranian military leader targeted by the United States.

After rallying on the first day of the new decade, some major U.S. stock markets declined on news of heightened tensions in the Middle East and concerns about the potential consequences, such as the disruption of oil supplies.

what a decade!

While some have called the 2010s a ‘lost decade’ because there was little economic growth, we disagree with the assessment. The decade was filled with remarkable events in politics, sports, science, pop culture, and other areas of interest. Here are a few memorable events from the past decade:

NASA’s Voyager 1 probe left the solar system.

Launched in 1977 to explore planets including Jupiter, Saturn, Uranus, and Neptune, the probe left our solar system in 2013. It will continue to send data until 2025.

 

The Patient Protection and Affordable Care Act was signed into law

The controversial law, which Encyclopedia Britannica reported, “required most individuals to secure health insurance or pay fines, made coverage easier and less costly to obtain. This cracked down on abusive insurance practices, and attempted to rein in the rising costs of health care,” remains under challenge in American courts.

 

eSports became an industry

To the delight of people who would prefer to spend their time gaming, online games became a recognized form of sports competition, complete with news coverage and multimillion-dollar prize money.

 

Civil and social movements changed thinking

There were pro-democracy protests in the Middle East (Arab Spring), and social movements in the United States (Occupy, Black Lives Matter, Blue Lives Matter, and MeToo, among others). MIT explained, “…a successful movement can change how we think and talk about key social issues.”

 

The Higgs Boson particle was found

Any fan of the television show, The Big Bang Theory, will know exactly how much this meant to Sheldon Cooper. The television show’s popularity was also a phenomenon of the last decade.

 

Carli Lloyd scored the fastest hat trick in World Cup soccer

Carli Lloyd scored a hat trick – three goals – in 13 minutes for the U.S. women’s national team during the World Cup final against Japan in 2015. She also played on the team that won the 2019 Women’s World Cup.

Hurricanes, earthquakes, and storms wrought destruction

Countries around the world were pummeled by storms during the decade. Hurricanes and tropical storms like Irene, Sandy, Harvey, Irma, Michael, Dorian, and Maria did significant damage in the United States and its territories. One of the most memorable was the Great Japanese earthquake and tsunami that preceded the Fukushima Daiichi nuclear accident.

 

The Chicago Cubs broke the curse

Advised by their manager to go out there and, “Try not to suck,” the Cubs won the World Series for the first time since 1908.

 

Entertainment took a turn toward streaming

Deadline Hollywood reported, “It is impossible to find a corner of the industry that has not been reshaped by streaming, from the pay TV ecosystem and movie exhibition to labor negotiations and talent deals.”

 

The 2010s provided disruptions and delights. Let’s hope the events of the coming decade will make the world a better place. For a closer look at 2019 in review, check out this link.

Weekly Focus – Think About It

“It’s the action, not the fruit of the action, that’s important. You have to do the right thing. It may not be in your power, may not be in your time, that there’ll be any fruit. But, that doesn’t mean you stop doing the right thing. You may never know what results come from your action. But, if you do nothing, there will be no result.”

–Mahatma Gandhi, Lawyer, politician, social activist

Like what you’re reading, be sure to check out our other blog posts.

Add Some Adventure To Your Retirement With These Travel Options

According to AARP, baby boomers expected to take 4-5 trips during 2019 (1). Retired boomers who plan to travel more might even exceed that pace once they’re no longer working. Over the course of a typical 20-30-year retirement, that’s an awful lot of beaches, an awful lot of athletic resorts, and an awful lot of bucket list landmarks getting crossed off.

Many retirees are exploring new types of travel to keep their itineraries fresh and their experiences invigorating. Here are three popular trends in retirement travel, as well as some things you should think about before clicking BOOK NOW! 

  1. Solo travel

No matter how good your marriage is, couples who don’t take the occasional break from each other often end up driving each other crazy. Both people need to have space for themselves at home. And both people also need space to pursue passions and interests that their spouse does not share.

If you feel like you’re dragging your spouse along on a golf trip, or if your spouse just isn’t as interested in leaving the States as you are, consider flying solo. You don’t REALLY have to hit the road alone if you don’t want to. Group travel packages will give you a chance to mingle with new people while also providing you with the security and structure of a set itinerary. Just make sure you’re booking with a reputable company and able to take care of yourself without a spouse’s constant supervision.

Also double-check your annual vacation budget before you book a solo trip. Make sure that doing something separately isn’t going to make it harder for you and your spouse to do something together. 

  1. Slow travel

A European tour might let you see Big Ben, the Eiffel Tower, and the Sistine Chapel in a week or two. But renting an apartment in Paris for a month will give you a very different and much more immersive experience.

That’s the appeal of slow travel, which is becoming more popular as services like Airbnb make it easier to find long-term lodging at affordable prices. Living like a local creates an entirely different daily routine. You’ll be more likely to venture off the beaten tourist path and really soak up local culture.

This kind of a vacation might require a little extra planning. Lean on any friends or family who’ve spent time in your slow travel destination to make sure you’re picking a suitable neighborhood for your stay. And while some people end up spending less on slow travel because they buy groceries instead of eating out every night, the longer you’re going to be away from home, the more money you should probably budget.

  1. Adventure travel

Anyone who equates vacation with R&R probably should steer clear of adventure travel. But an African safari or a trek through Patagonia will definitely get you out of your comfort zone.

Adventure travel can also be as spiritually and emotionally rewarding as it is physically rewarding. Connecting with nature while you’re on a long canoe trip or observing exotic wildlife can clear your head and make you rethink your place in the world. Many adventure travelers come home with a new favorite cause that becomes part of their everyday retirement routine.

If you think you have a couple retirement adventures in you, consider scheduling them earlier in your retirement. This is when you’re likely to be healthier and more mobile. Also, be realistic about what an “adventure” really means to you, and what you’re really capable of doing. You might have missed your whitewater rafting window. But that doesn’t mean you can camp near the Grand Canyon and hike for a couple hours every day.

Are you planning on racking up frequent flier miles once you retire? Are you already shopping for RVs? Come in and talk to us about your travel plans. We can help you make sure your retirement plan is as ready for adventure as you are.

For more great retirement resources, check out the AARP website.

Relocating On Your Mind? Consider These Questions First

Housing is a large item on any person’s budget. But folks about to enter or leave the workforce have to be especially thoughtful about how their living situation is going to impact their financial plan – especially if they’re contemplating the thought of relocating.

Could leaving behind the hustle and bustle of a big city improve your Return on Life? Before you start packing up, ask yourself these four important questions about relocating:

How will you fill your days?

Traffic, street noise, crowds, pricey restaurants and shopping – yes, city life can be exhausting.

But cities also provide tremendous opportunities to stay stimulated, connected with other people, and curious.

No matter how passionate the arts community is in that suburb you’re eying, it’s not going to compare with the museums and theatres you’re used to frequenting on the weekends.

Downtown, your meals might rotate between Italian, Thai, Middle Eastern, sushi, tapas, and all of the fascinating people those meals bring you in contact with. Some of that cultural variety might trickle out to the nearest suburbs … eventually.

Widely available public transportation means you can leave the car at home, especially if you’re getting older and driving is becoming more challenging.

Finally, what are the all-in costs of moving? Not just the difference in what a pizza costs, but the differences in taxes, insurance, health care? What about the cost of hiring a realtor and getting a lifetime of stuff from here to there?

Sure, the internet and cable TV mean that you don’t have to live in a major metropolis to stay connected to the wider world. Yes, suburban or small-town life might be more cost-effective. But make sure that unplugging from city life is going to be relaxing and not boring, cost-effective and not more costly.

What is wrong with home now?

Change can be good, but relocation is a big change. Millennial newlyweds looking to buy a home in an excellent school district might be following a long-term dream for their family. So is the retired couple that’s always wanted to live on the beach prepping to relocate to Florida.

But there are certain things about your living situation that change can’t “fix.” If you’ve become too much of a homebody since retirement, you need to put more thought into creating a schedule that revolves around your passions, your skills, and the people you love. Is moving going to help you do that? Or will you feel even more isolated in a new place?

Moving to a home with nicer amenities sounds appealing. But why do you really want to trade your downtown condo for a house with a theatre in the basement and jacuzzi in the backyard? Because you love those things? Or because you need somewhere to collapse after another week of working too hard at a job you don’t like? Is your housing problem really a career problem?

Will it be difficult to visit loved ones?

Our friends and family round out our golf foursomes. They attend our weekly dinner parties. They show up at our kids’ concerts. They fill grandma and grandpa with pride. They meet us for lunch on short notice. And they are our first line of support during life’s major transitions.

Who is going to fill those roles for you if you move? Are you moving closer to your loved ones? Or so far away that you could be in danger of losing touch?

What makes you happy?

They say home is where your heart is. Ultimately, where you live should make your heart feel full. And as your life changes, your definition of fulfillment might change along with it. When you’re young, a studio apartment next to the subway might feel enormous. Maybe your life will fit in that apartment forever. Or maybe your family, your career goals, and your financial means will redefine happiness and lead you someplace new.

Do you anticipate a major move somewhere in your future? Let’s plot that transition on your $Lifeline and discuss how we can start planning ahead together.

Also, for more fantastic retirement resources head on over to the AARP website.

How To Use A Legacy Letter

Your legacy isn’t just about your assets.

 

Of course, as part of our Life-Centered Planning process, we will help you coordinate with attorneys and tax experts to create an estate plan that will provide for your heirs in accordance with your last wishes.

 

But hopefully, after years of planning for a better Return on Life, you’ve come to appreciate what your money can and cannot buy. That’s why we recommend that our clients write a Legacy Letter to help their heirs think about their own relationships to money in more meaningful ways.

 

What is a Legacy Letter?

 

A Legacy Letter is a way for you to share your values, life lessons, cherished memories, hopes for your family’s future. It also covers anything else that is really important to you.

 

This isn’t a will, so you won’t be assigning any of your assets. And this isn’t a family history, although you might include things you learned from your own parents and grandparents that you want your heirs to be mindful of in their own lives. This is you, reflecting on a life well-lived, passing on everything you’ve accumulated that can’t be bought or sold.

 

One of the great things about this exercise is that your Legacy Letter can be whatever you want it to be. It could be a typed or hand-written letter. It could be an audio or video recording. It could even be a mix, such as a printed list of your most cherished values accompanied by an mp3 you dictate into your phone. Use whatever media makes it easiest for you to speak to your family in your own voice.

 

What will my heirs want to know?

 

Some folks look at their kids and grandkids, immersed in their cell phones, and think, “My family won’t appreciate a letter like that, they just want the money.”

 

But eventually, your heirs are going to confront many of the same life and money challenges you have. They will face the scary prospect of leaving an unfulfilling career. They likely will also wonder how much support to their children is too much. They’ll be tempted to make a big-ticket purchase just to keep up with the Joneses.

 

Explaining how you did or didn’t stick to your values at these memorable moments will show your heirs that you can’t just throw money at life’s problems. Your Legacy Letter will be a road map leading your family to better decisions and more fulfilling uses of their time and assets. And if your estate plan includes charitable giving, explaining why particular causes were important to you could inspire a tradition of giving in your family that does good for generations.

 

When should I write my Legacy Letter?

 

The golden rule of all estate planning is: don’t wait. If something unexpected happens to you or your spouse, it’s so important that you have a plan in place that protects your assets and distributes them as you see fit.

 

That applies to your Legacy Letter as well. Your values are arguably your most important asset. In years to come, this letter will be a source of comfort and inspiration to your family.

 

And while this might seem like an activity for a retiree, many of our younger clients have told us that they found writing a Legacy Letter very beneficial. You can write a legacy letter at any stage of life. For example, if you’re getting married, you and your spouse could write a joint letter that describes your hopes and dreams for the future. If your children are launching into their careers, you could share your lessons about succeeding in life. The possibilities are endless. Many clients tell us they’re looking forward to updating their Legacy Letters with more life experiences down the road.

Give it some thought…

If you’re having trouble getting started with your own Legacy Letter, we’d be happy to help you jump-start the process. Make an appointment to come in and revisit or complete some of the Return on Life exercises we have available for you. Your stories and your values are every bit as important to us as your money. Let’s do a thorough review of your legacy planning to make sure you’ve secured the things that are most important to you for the people you love the most.

 

 

 

The Longevity Effect

Longevity can be both a gift, and a curse. This generation of retirees is going to live longer than any in history. Today’s seniors are healthier, more active, and receiving better preventative care. And on top of that, a growing group of scientists is trying to harness technology and modern medicine to slow down the aging process.

Experts call the cumulative effect of these changes to life expectancy “the longevity effect.” They project that extending our years of healthy living can have tremendous benefits both to individuals and to society as a whole.

Let’s look at some of the cutting-edge advances in slowing biological aging, as well as what experts recommend folks can do right now to stay more than just young at heart.

Genetic Testing

You’ve probably seen products like AncestryDNA that can give you a robust genealogical profile from your saliva. Scientists are continuing to progress on more sophisticated versions of this technology that will be able to use your genes to test for serious diseases. There’s even hope of being able to test for genes that are associated with longevity, and others that could eventually shorten your lifespan.

We all know that the best medicine is preventative. But if scientists can perfect this “road map” for life expectancy, the implications for your financial planning could be enormous. An accurate longevity expectancy could make it much easier to plan ahead for significant medical expenses that might not be covered by Medicare. And if you had a better idea of when you were likely to start “slowing down” later in your retirement, you might enjoy your early retirement years more and worry less about running out of money.

Fighting “Zombie Cells”

The cells in our bodies are constantly dividing. After a certain number of divisions, cells usually die. Those that don’t – so-called “zombie cells” – can build up in our bodies over time and interfere with how our healthy cells operate.

Scientists are looking for ways to clear out zombie cells via “interventions” such as pills. Clear out the zombies, and you’re eliminating cellular environments ripe for things like cancer, cardiovascular disease, Alzheimer’s, and osteoporosis. The more resistant we are to these kinds of diseases, the greater our longevity will be. And the longer you live without having to cope with a debilitating disease, the longer you’ll be able to work part-time, volunteer, play your favorite sports, and vacation with your favorite people.

In the Meantime

There’s no guarantee that these specific medicines and technologies will be ready for the general public during your retirement. But it is safe to assume that advances both gradual and rapid will continue to improve the quality of your health care.

The most important thing you can do to keep aging in check during retirement is to take advantage of the services Medicare provides right now. That starts with your free “Welcome to Medicare” visit, which will help you and your doctors get a baseline reading of your health upon retirement. Medicare also covers many vaccinations, a wide variety of preventative screenings and tests, an annual wellness checkup, and a depression screening if you’re struggling with the emotional transition into retirement.

These services might not sound as exciting as fighting zombie cells, but they’re the most effective ways to detect significant health problems while it’s still early enough to do something about them.

So while we’re all waiting for the next big medical breakthroughs, old fashioned common sense will go a long way towards a long and healthy retirement. Go to the doctor. Eat well. Exercise. Wear sunscreen. Pursue your passions with a vigor that will keep your body and mind energized.

And any time you want to review how your financial plan will take care of you at every phase of your retirement, don’t hesitate to call us up.

Source:

Will We Soon Be Taking a Pill to Slow Aging?

We also have some great return on life resources over at our website, so make sure to click here and check that out.

How To Avoid Knee Jerk Reactions to Financial Events

As part of our Life-Centered Planning process, we’ve talked about how market volatility is a normal part of investing. We’ve also discussed how we’ve structured your investments to “weather the storm” and maintain a comfortable level of income for you and your family during turbulent times so you can avoid knee jerk reactions.

But we also understand that even folks who are armed with this knowledge can get nervous during a market dip. What’s important is that you know how to prevent that initial wave of negativity from leading you to rash decisions that could damage your nest egg much worse than a market correction.

Dr. Martin Seay is a specialist in positive psychology, which focuses on strategies that people can use to improve their sense of well-being. Dr. Seay’s ABCDE method can help you work through your reactions to distressing financial news and arrive at a positive outcome.

Let’s walk through an example of how to use this method to avoid making a bad, emotion-based financial decision.

A. Activating Event


Sometimes stress and anxiety can feel all-encompassing. Dr. Seay believes it’s important that we pinpoint the event that triggered our negative feelings.

So, while you might feel general anxiety about your finances, drill down a little deeper. Is your job secure? OK. Are you saving and investing according to your financial plan? Good.

Did you just read on social media that today’s market correction was “THE BIGGEST ONE-DAY DROP IN HISTORY!”

Ahh, there it is. Let’s move on to the next step.

B. Belief

Market volatility can rouse some of our worst instincts about investing. We might fall back on long-buried Beliefs like, “This game is rigged!” We might feel like we’ve entrusted our financial future to powers beyond our control.

As you work through this step, it’s important to ask yourself where your Beliefs come from. Have you been unsettled by widespread media coverage of major financial problems, like the 2008-2009 housing crisis? Have you had negative interactions with the finance industry in the past? Perhaps one of your parents distrusted the markets or made a poor investment that had a negative impact on your family.

Figuring out why you believe what you believe about the markets can help alert you before you fall back into bad financial habits.

C. Consequences

Panicked investors who can’t shake negative Beliefs about the markets often make poor decisions during downturns. They think they need to “get out fast” to avoid more negative Consequences, like further losses.

Ironically, cashing out your investments during a market correction usually leads to far more serious Consequences in the long run.

So how can you stay focused on the big picture?

D. Disputation

Start by using what you know to push back a little against what you Believe.

For example, we’ve discussed in our meetings that the historical, long-term trajectory of the financial markets has been to rise over time. And now, market averages such as the Dow Jones Industrial Average are near all-time highs. Therefore, when the market does have a temporary drop, we might say, “The Dow was down x hundreds of points today.” It sounds like a big number, but as a percentage, it may just be normal volatility.

We’ve also discussed that “market timing” strategies usually just don’t work. That’s why your portfolio is diversified, balanced, and strategically rebalanced as necessary. Decades of market history have shown that sticking to this type of investment strategy may be more effective – and stable – than trying to jump in and out of the market based on what’s happening in the news right now.

Today’s losses are really just a kind of “tax” that you’re paying on the wealth we’re helping you build for tomorrow.

E. Energized

It’s amazing how just reminding ourselves of what we know to be true can make us feel better about a negative situation. Hopefully at the end of this process, you feel a renewed sense of positivity about this present moment and your financial future.

But we understand that market volatility can be complicated. And as you’re nearing retirement, a downturn can be downright nerve-wracking.

So if you need help walking through your ABCDEs the next time the market corrects, make an appointment to meet with us. We’ll run through the important facts you need to know and decide what moves, if any, we need to make to keep you on track with your financial plan and avoid those costly knee jerk reactions.

We also have some really great resources available on our YouTube Page so head on over and check it out.

Increase Your Generosity Without Jeopardizing Your Retirement

How are you going to get the best, most fulfilling life possible with the money you have once you retire? Generosity is key, but it can be costly.

Study after study has shown that retirees who spend their time and money on experiences are much happier than those who just buy stuff. Charitable giving can be a particularly meaningful way to keep yourself active and put your assets to good use. Too much generosity can be costly, so it’s important you follow these steps.

Just as long as you don’t overdo it.

If you’re feeling an increased desire to give back now that you’ve retired, here are some tips on balancing your good intentions with what’s best for you and your family.

1. Do your homework.

Recently, there have been high-profile cases of fraud and misappropriated funds at some very famous charitable organizations. But even if you’re giving to a charity that is run well, you should understand where your money is really going. If you’re happy with your dollars helping a larger organization to pay its bills and employees, great. If you want your money to have a more immediate impact on those in need, consider giving to smaller organizations in your community.

Do some googling and check online watchdog databases to make sure your favored charity is on the up-and-up. And unless you know the organizers personally, avoid online crowd-funding campaigns that aren’t legally accountable for how they use donations.

2. Consider a volunteer position.

Your favorite non-profit or charitable organizations need money. But they also need manpower.

If you’re thinking about working part time in retirement and a paycheck isn’t really important to you, schedule regular volunteer hours instead. You’ll get all the same benefits of having a job: structure, responsibility, camaraderie. Plus, seniors who volunteer report lower levels of stress, an increased sense of purpose, and better physical and emotional health.

3. Teach, tutor, or consult.

When looking for a charitable outlet, don’t overlook the professional skills that you honed over your career.

You might not have the qualifications to teach at a school or university, but you could talk to your local community center about holding a seminar that could benefit your neighborhood. You might be done balancing your company’s books, but there are high school kids who could benefit from your mastery of math. Open your door to local small business owners or recent college graduates who need an entrepreneurial mentor.  

4. Make a plan.

It’s a scientific fact that giving makes us feel good. But some seniors may get too caught up in their generosity. They forget that gifts and donations are coming from that same pool of assets that are supposed to keep them safe and secure for the rest of their lives. They may have trouble setting limits and saying no.

There is indeed such a thing as too much giving. You might not think much about writing an extra check or two early in retirement. But seniors have to maintain a long-term perspective on their nest eggs. This generation of retirees is going to live longer, more active lives than any in history. You need to make sure that helping someone today isn’t going to make it harder to cover your health care and cost of living needs tomorrow.

So, if you and your spouse want to make regular charitable donations, it’s important that you come in and talk to us. We can incorporate giving into your monthly budget and retirement income plan. If you want to make your generosity more permanent, we can also help you establish a charitable trust and add sustained giving to your estate plan.

We’re always happy when our clients want to help others. But it’s our responsibility to make sure your financial plan covers your best interests first. Let’s work together on a plan that will make your retirement secure and the world around you a little brighter.

For more on topics like this, we are doing some really cool stuff with our podcast. Check it out.

How To Improve Your Relationship With Money

Ever wonder how you can improve your relationship with money? Many people have a complicated relationship with money. Hang-ups carried over from childhood experiences get mixed together with positive and negative experiences from adulthood. Few people ever take the time to reflect on what money really means to them and how they can “get right” with money to make smarter decisions.

Take time to answer these 5 questions and you’ll do a better job of living your best life possible with the money you have.

1. What’s your first money memory?

Your earliest experiences with money probably happened in your home. You saw how your parents earned and managed their money. You probably compared the quality of your family home and vehicles to what you saw at friends’ and neighbors’ houses. An unexpected job loss or illness might have led to some very lean holidays or a skipped vacation. Or, if you grew up in an affluent household, you might have taken money for granted in a way you no longer do now that you’re the one earning it.

Identifying some of these early memories is critical to reassessing your relationship with money. Are you following positive examples towards decisions that are going to improve your life? Or, without even realizing it, are you repeating poor money habits that are going to hurt you in the long run?

2. Do you feel like money is your servant or your master?

Sometimes money makes us feel like we’re a hamster on a wheel, running as fast as we can without ever really getting anywhere. But if you never stop chasing after that next dollar, when it comes time to retire, all you’re going to have is money, and a whole lot of empty days on your calendar.

People who get the most out of their money recognize that it’s a tool they can use to skillfully navigate to where they want to be in life. So, instead of working too long and hard for more money, think about how to put the money you have to work for you.

3. What would you do if you had more money?

You’ve probably read about studies that show lottery winners don’t end up any happier than they were before their windfalls. This is a dramatic example proving some pretty conventional wisdom: money doesn’t buy happiness. That’s especially true if you’re stuck on your wheel for 40 hours every week just chasing more and more money.

If the idea of having more money gets you thinking about all the things you’d buy, it’s important to remember how quickly even the fanciest new car smell will fade.

If you would immediately quit your job if you had enough money to support your family and live comfortably, then maybe you need to think about a more fulfilling career.

Having more money might not “solve” some issues you’re currently experiencing, but asking what would you do if you had more money might lead you to new decisions that improve your current life satisfaction.

4. What would you do if you had more time?

Imagine you don’t have to work. You can spend every single day doing exactly what you want. What does your ideal week look like? What things are you doing? What hobbies are you perfecting? Where are you travelling? With whom are you spending your time?

These things often get pushed to the side when we’re busy working. But if your money isn’t providing you with opportunities to spend time doing what you love with the people you love, then your work-life balance might need an adjustment.

5. What would your life look like to you if it turned out “well”?

Hopefully by now you’re starting to think about how your relationship to money could be keeping you from getting the most out of your money.

The successful retirees that we work with don’t look back fondly on the amount of money they made or how much stuff they were able to buy. They tell us their lives turned out well because they used money to make progress towards major life goals. They say their money provided them the freedom to pursue their passions. And their sense of well-being increased as they committed time and resources to health, spirituality, and continual self-improvement.

When you reach retirement age, we want you to look back happily on a life well-lived. Come in and talk to us about how our interactive tools and Life-Centered Planning process can improve your relationship to your money.

There’s also some really great resources you can find at www.investopedia.com to help you improve your relationship with money.

How To “Spark Joy” In Your Finances

Get Your Financial House in Order


“Does this spark joy?”

Marie Kondo

Millions of people are asking themselves this question about their homes and possessions thanks to Marie Kondo and her wildly popular decluttering philosophy.

Once the kids are moved out, it’s just you, your spouse, and whatever is still boxed up in extra bedrooms and the basement. Whether you’re looking for joy or just a little less space and stuff to manage, you might be thinking about decluttering and “downsizing” into a smaller home before you retire.

But sometimes less can be more: more hassle, more complicated, and more expensive. Before you and your spouse order that dumpster and make a down payment on that condo, consider these important pros and cons of downsizing.

PRO: Make a change while you can still enjoy it.

The younger you are during a downsize, the less help you’re going to need clearing out what you don’t want and relocating. And a clean, organized home can be a great “blank slate” as you start easing into your new life. You might even organize a move around interests you want to pursue in retirement, like a community with golf and tennis facilities, or a burgeoning foodie hotspot with an exploding restaurant scene.

CON: You might make a change you don’t both enjoy.

Couples need to be very clear with each other about their expectations for what life is going to be like in retirement, and how each of you want to spend your time separately and together. A downsizing that moves you to a new town, away from friends, family, and familiar comforts, can go from exciting to exasperating very quickly if both spouses aren’t committed to adventuring together. One spouse might be happily teeing off while the other is puttering around the house bored silly.

And while a smaller house without kids and clutter might mean more room for you and your spouse, it’s still going to be closer quarters than you’re used to. Is less space going to provide you both with enough personal space?

PRO: Simplified living.

A smaller home means less upkeep. If you buy, you’ll probably pay less in taxes than you did at your larger house. With less space to heat and cool, and no kids soaking up extra water, food, and electricity, your monthly bills might go down. If your smaller house is relatively new, it might require less upkeep and age well right along with you.

CON: Simple isn’t free.

There’s a pretty good chance your current furniture isn’t going to fit or fit in at your new house. Our old stuff is never as valuable to resellers as we want it to be, so you’ll probably end up dipping into your nest egg to buy new furnishings. Anything you don’t want to get rid of you’re going to have to store, either in that beautiful, empty basement, or at a storage facility you’ll have to pay for. If you move to a different state, your smaller home might come with higher taxes. What you save on taxes buying a condo might be offset by association and communal maintenance fees.

PRO: Living the best life possible with your money.

The best reason to consider downsizing doesn’t really have anything to do with decluttering. It’s not about managing space or what to do with all your possessions.

No, the reason to downsize is because that smaller home you’re thinking about will allow you to live the life you want to live in retirement. It’s because that home is going to give you the space to do the things you want to do with the people you love, while minimizing the things you don’t want to do anymore.

Does that idea spark joy?

Then let’s talk. Come in and tell us why you’re thinking about downsizing. We’ll run some numbers and discuss how a new, smaller home could open a big new world of possibilities for you and your spouse. 

How Does Your Retirement Savings Compare?

“How am I doing?”

-Every Investor…..ever

Ever wonder how your retirement savings stack up against other people your age? That’s a big question that most people have when it comes to their money. One way we tend to look for answers is by comparing what we have to what our neighbors, friends, and family, have. Even though we know deep down that “the grass is always greener on the other side,” it can be hard to look away when our phones, computers, and TVs are practically forcing us to make these comparisons.

We understand the worry that you might not be keeping pace with your peers. But if you’re wondering about where your retirement savings “should be,” it’s important that you look at these numbers with the proper context.

The numbers.

According to Nerdwallet, here’s how average retirement savings break down by age:

Under 35

Average household retirement savings: $32,500

Median household retirement savings: $12,300

Ages 35 to 44

Average household retirement savings: $100,100

Median household retirement savings: $37,000

Ages 45 to 54

Average household retirement savings: $215,800

Median household retirement savings: $82,600

Ages 55 to 64

Average household retirement savings: $374,000

Median household retirement savings: $120,000

Ages 65 to 74

Average household retirement savings: $358,400

Median household retirement savings: $126,000

As you might have guessed, retirement savings tend to ramp up as we age. In part, this is because the older we get, the more real retirement becomes, and more prepared we want to be.

But as fiscally responsible people age, their debt level tends to drop as well. No more kids to support. No more student loan payments. Vehicles and houses get paid off. Credit cards get used less (unless you’re focused on accumulating points) and paid down. There’s only so much you can keep in a low-interest savings account before you want to put more of your money to work.

The numbers behind the numbers

If these figures seem a bit low to you, you’re not wrong. Most financial experts believe that, generally, Americans are not saving nearly enough for retirement.

Yes, having a couple hundred thousand in savings and investment accounts may sound like a lot of money. But people are also living longer and more active lives than ever before. That means your retirement assets are going to have to last longer than your parents’ and grandparents’ did.

And as pensions continue to dry up, the responsibility for preparing for retirement has shifted more and more to individuals. That’s going to be a challenge for anyone who’s significantly below these savings levels. And it’s going to be a BIG problem for the 43% of households headed by someone 35-44 who don’t have any retirement savings at all.

Is an “average” retirement good enough?

Let’s say you’re the average 65-year-old with just over $300,000 in the bank. How long is that $300,000 going to last? Is that nest egg going to provide the retirement you’ve been dreaming about and working for most of your life?

There’s no one-size-fits-all answer to those questions. We all have different passions, goals, healthcare needs, and lifestyle expectations. Some retirees might live quite happily at or even a little below the average level.

But what happens if your spouse has an accident and needs to see a specialist? What if your roof needs a major repair? Will an emergency stretch your “average” retirement too thin?

What happens if, five years into a twenty-year retirement, you start to feel bored and restless? What if you decide you need to see more of the world? What if you can’t let go of that passion project you’ve always wanted to develop into your own business? Will your nest egg provide for changes that will make your retirement more fulfilling?

How your money measures up.

Successful retirement planning balances the things that we can anticipate with the things we can’t. That’s why, as we work together, we’ll never hold up a graph comparing where your money is to where your peers are. We’re not interested in outside standards of “measuring up.” We’re interested in how your money measures up to what YOU want out of life, and what you’ll need to stay comfortable on rainy days.

Contact us to review your saving plan and spending levels. We can help you adjust as necessary to make sure that both are on track to hit the standard that matters most: yours.F

Source

https://www.nerdwallet.com/article/the-average-retirement-savings-by-age-and-why-you-need-more

Financial Planning is About Making Your Life Plan A Reality

Many folks who have just begun working with us are surprised by how our planning process starts. We don’t begin by talking about IRAs, 401(k)s, or how much you’re saving. Instead, we begin by talking about you, not your money.

Putting your life before your financial plan.

As Life-Centered Planners, our process begins with understanding your life plan. We start by asking you about your family, your work, your home, your goals, and the things that you value the most.

Our job is to build a financial plan that will help you make your life plan a reality.

Of course, building wealth that will provide for your family and keep you comfortable today and in retirement is a part of that plan. So is monitoring your investments and assets and doing what we can to maximize your return on investment.

But we believe maximizing your Return on Life is just as important, if not more so. People who view money as an end in and of itself never feel like they have enough money. People who learn to view money as a tool start to see a whole new world of possibilities open in front of them.

Feeling free.

One of the most important things your money can do for you is provide a sense of freedom. If you don’t feel locked into chasing after the next dollar, you’ll start exploring what more you can get out of life than just more money.

Feeling free to use your money in ways that fulfill you is going to become extremely important once you retire. Afterall, you’re going to have to do something with the 40 hours every week you used to spend working! But you’re also going to have to allow yourself to stop focusing on saving and start enjoying the life that your assets can provide.

Again, having money and building wealth is a part of the plan. But it’s not THE plan in and of itself.

The earlier you start thinking about how you can use your money to balance your vocation with vacation, your sense of personal and professional progress with recreation and pleasure, and the demands of supporting your family with achieving your individual goals, the freer you’re going to feel.

And achieving that kind of freedom with your money isn’t just going to help you sleep soundly at night – it’s going to make you feel excited to get out of bed the next morning.

What’s coming next?

So, when does the planning process end?

If you’re like most of the people we work with, never.

Life-Centered Planning isn’t about hitting some number with your savings, investments, and assets. And we’re much more concerned about how your life is going than how the markets are performing.

Instead, the kinds of adjustments we’re going to make throughout the life of your plan will be in response to major transitions in your life.

Some transitions we’ll be able to anticipate, like a child going to college, a big family vacation you’ve been planning for, and, for many of you, the actual date of your retirement. Other transitions, like a sudden illness or a big out-of-state move for work, we’ll help you adjust for as necessary.

In some cases, your life plan might change simply because you want something different out of life. You might start contemplating a career change. You might decide home doesn’t feel like home anymore and start looking for a new house. You might lose yourself in a new hobby and decide to invest some time and money in perfecting it. You might decide it’s time to be your own boss and start a brand new company.

Planning for and reacting to these moments where your life and your money intersect is what we do best. Come in and talk to us about how Life-Centered Planning can help you get the best life possible with the money you have.  Visit Our Website to learn more.

We also have some really great resources on our YouTube Channel, so head on over there to check it out.

How To Test Drive Retirement

Want to Retire? Take It for a Test Drive

There are many reasons why people who could retire are hesitant to do so. Some people think they need to wait until they’re 65 or older. Some are worried about running out of money. Many parents want to keep supporting their children through some major life transition, like college, marriage, or buying a first home. 

Maybe the most common reason we see for a retirement delay is folks who just can’t imagine their lives without work. That’s understandable. A routine that’s sustained you and your family for 30 or 40 years can be a hard routine to shake. 

But retirement doesn’t have to be all or nothing right away. If just thinking about retiring makes you jittery, use these tips to ease into retirement a little at a time. 

1. Talk to your family.

Clear, open communication is an essential first step to approaching retirement. Be as honest as possible about what you’re feeling. What worries you about retirement? Does the idea excite you? What do you envision your days being like? Where do you want to live? What does your spouse want retirement life to be like? 

2. Talk to your employer.

Many companies have established programs to help longtime employees transition into retirement. You might be able to trim back your hours gradually to get an idea of what days without working will be like. You’re also going to want to double-check how any retirement benefits you may have are going to work. Discuss any large outstanding projects with your supervisor. Make a plan to finish what’s important to you so that you can leave your job feeling accomplished. 

Self-employed? Give your favorite employee (you) less hours and fewer clients! Update your succession plan and start giving the soon-to-be CEO more of your responsibilities. Make sure you have the absolute best people working for you in key leadership positions so that your company can keep prospering without your daily involvement. 

3. Make a “rough draft” of your retirement schedule. 

What are you passionate about? What are some hobbies you’d like to develop into a skilled craft? Do you want to get serious about working the kinks out of your golf swing? Are there household projects, repairs, or upgrades you want to tend to? A crazy idea you kicked around at work you’d like to build into a new company? A part-time job or volunteer position you’d like to take at an organization that’s important to you? New things you want to try? New places you want to visit? Grandkids you want to see more often?

Try filling out a calendar with some of your answers to these questions. As you start to scale back your work hours, take a few lessons or volunteer shifts. Sign up for a class. Leave town for a long weekend. See what appeals to you and what doesn’t. 

Remember, you don’t have to get your schedule right the first time! A successful retirement will involve some trial and error. Learn from things you don’t like and make a point to spend more time doing the things you do like. 

4. Review your finances. 

This is where we come in! 

Once you and your spouse have settled on a shared vision for retirement, we can help you create a financial plan to help ensure you are financially fit for (semi)-retirement. We’ll go through all of your sources of income, retirement accounts, pensions, savings, and other investments to lay out a projection of where your money is coming from and where it’s going.

We can coordinate all aspects of your situation and collaborate with you on the best course of action. You don’t have to face retirement alone and make big decisions without expert guidance. 

Coming in and talking to us about your retirement is a great “Step 1” option as well. So if you are dreaming of those days when work is optional, give us a call and we can help you through this phase of life.

For more retirement resources check out some of our other blog posts.

For more help with retirement, the AARP website can be a great resource as well.

3 Life Insights from the Jeff and MacKenzie Bezos Divorce

One of the reasons that divorce is such a challenging life transition is its public nature. A couple might keep their problems private as they try to work through them. But if a rift opens that can’t be mended, the couple will have to share some very difficult news with friends and family as they separate from one another.

Few of us will have to reveal emotional personal issues to as wide an audience as Jeff and MacKenzie Bezos recently did. The statement that Jeff released on Twitter suggests that he and MacKenzie are trying to make their split as amicable as possible by using three insightful ideas that could help anyone struggling through a divorce.

1. Be open and honest with those closest to you.

“We want to make people aware of a development in our lives. As our family and close friends know, after a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends.”

Couples need privacy as they deal with strains on their marriage. But once a decision is made, clear communication with your family, friends, and each other will be very important. That goes double if any young children are in the picture.

The more open a couple is about what’s happening, the easier it will be for you to find the outside support that will help you through this transition. Good dialogue might also help you and your former spouse to focus on the essential tasks at hand, like dividing your assets and updating your essential estate planning documents.

2. Be grateful.

“We feel incredibly lucky to have found each other and deeply grateful for every one of the years we have been married to each other. If we had known we would separate after 25 years, we would do it all again.”

Shame, embarrassment, and guilt are common feelings associated with divorce. Playing the blame game or trying to “win” the divorce can quickly turn all those amicable best intentions into bitter personal and legal issues.

Instead, the Bezos statement is a reminder that the end of a marriage – especially a long one – doesn’t erase all of the positive things that came before it. If an amicable divorce is possible in your particular situation, then don’t be ashamed or embarrassed. Cherish those precious shared experiences, like the birth of children, happy vacation memories, the difficult times you helped each other through. Embracing these feelings of gratitude will help ease both you and your partner through this process.

3. Focus on the positives ahead.

“We’ve had such a great life together as a married couple, and we also see wonderful futures ahead, as parents, friends, partners and ventures and projects, and as individuals pursuing ventures and adventures.”

When we work through the $Lifeline exercise, we emphasis that important transitions like retirement, children graduating, weddings, and yes, divorces, are ends in one respect, but also new beginnings. They’re the start of new chapters in your life.

That might be difficult to see when the pain of a divorce is still raw. But it’s important to open yourself up to new opportunities when they present themselves. You’re about to start your single life all over again. And yes it’s scary. It may not be what you wanted. And you may be bitter. But over time, you may be able to see what awaits you on the other end. It could be traveling that you’ve longed for. Maybe you’ll relocate, start a new career, begin new hobbies, and meet new people. You might have more financial resources at your disposal to explore solo than you did when you were younger and unmarried. And you might approach these experiences with a more mature and grateful perspective, enjoying every minute just a little bit more fully.

We want to help you through all of life’s major transitions, the positives as well as the challenges. If there’s change on the horizon, make an appointment to come in and review the $Lifeline exercise with us. We can help you plan ahead so that the next chapter of your life is the most fulfilling yet.

Make The Most Of Your Empty Nest

How to Make Your Empty Nest Time a Prime Time in Your Life

Time flies when you’re a parent. Just when you’ve wrapped your head around the demands and responsibilities of raising a child, you turn around and your little bundle of joy is ready to head out into the world.

This empty nest transition can be very emotional. And in some cases, like children who stay on your health insurance until age 25, the break isn’t as clean as it used to be. But this change should also be exciting! Here are some tips on how you and your spouse can stay positive and make the most out of all your new free time, all that new space, and hopefully, all that extra money.

1. Celebrate!

First off, some major congratulations are in order. Raising children is as rewarding as it is challenging. In order to get where you and your spouse are today, you had to make so many sacrifices, juggle work and family schedules, and carefully manage your finances.

An empty nest fills some parents with sadness and loneliness. But you should focus on the positive. Your kids are ready to be adults. Be proud of them, and of you and your spouse. Pop a good bottle of wine you’ve been saving or treat yourselves to a night out. You deserve it. An exciting new part of your life is about to begin.

2. Readjust your budget.

Children are wonderful. They’re also really expensive! No more sports fees. No more restocking the fridge every other day. Depending on their ages and how much you’re helping with their transition into adulthood, no more school tuition or piggybacking on insurance and phone plans.

Even the smallest of these expenses adds up quickly month after month. Now that they’re in the past, it’s time to make a new budget. You might find ways to ramp up your savings and contributions to your retirement accounts. You also might be able to afford a few more creature comforts or an extra trip or two.

3. Reclaim your space.

If your house suddenly feels a little emptier, well … it is. Too empty? If you and your spouse now have more room than you really need, it might be time to consider downsizing and economizing. Any new homes or neighborhoods in your community that look appealing? Have you considered moving out of state to start a new adventure?

If you’re happy where you are, take back those vacant rooms. Refurnish with a more grown-up touch to create a guest room for visiting friends and family. Give your hobbies and passions their own space by making a crafting room or a library.

Added bonus: if your kids have any trouble “adulting,” they’ll be more motivated to figure things out for themselves if there’s an easel or writing desk where their beds used to be.

4. Reconnect with your spouse.

You and your spouse are going to have more one-on-one time now than you’ve had since you were newlyweds, especially if you’re both getting ready to retire. What things did you used to do together before all those soccer practices and ballet recitals started dominating your schedules? What dream vacations for two have you been putting off? Have your golf or tennis swings gotten a little rusty over the years? Do you have time to cook meals together now?

Another activity that might bring you and your spouse closer is regular visits to your adult children and any grandchildren you might have. Seeing your kids on their own, flourishing at college or raising their own kids, will only deepen the sense of pride you should feel for a job well done.

5. Talk it out.

Major life transitions are often more challenging than we’re prepared to admit. More room, more free time, and more cash in hand are all positive. But the feeling that a large part of your life is over might be hard to shake.

Your blank calendar and lack of routine can be intimidating. Empty bedrooms can feel lonely. And while empty nest blues are often associated with the mother, many fathers suffer in silence. Make sure that you and your spouse are open and honest with each other about what you’re both feeling and get help if necessary.

On the flipside, you might feel overwhelmed in a good way – thrilled by all the options available to you, excited to start something new, but unsure of where to begin.

Again, step one is clear communication with your spouse. Make sure that you are on the same page about what you both want from this new stage of your life. Plan activities that you can do together. But also make space in your new routine for each of you to explore, learn, and grow individually.

Step two: come in and talk to us. We can help you sort through the financial implications of your empty nest and make sure you have the resources to live your best possible life with the money you have.

Is How You Use Your Money Aligned With Your Values?

Is How You Use Your Money Aligned With Your Values?

By Mike Desepoli, Heritage

A hamster in a wheel.

Have you ever watched a hamster running in a wheel? All that running, all that effort, day after day after day … But the poor little critter never really gets anywhere, does he?

Many of us feel the same way about our money.

More specifically, we feel that way about the work we do to get that money. We spend forty hours every week on a wheel, running after a paycheck. And then, first thing Monday morning, we’re back on the wheel, and the whole thing starts over again.

Many folks just keep repeating this cycle, over and over, until they finally retire. They think that stepping off the wheel just isn’t an option because they have bills to pay, college expenses to save for, and a dream to be “financially set” before retiring from work. It begs the question if he we use our money is aligned with our values.

How much is enough?

These are all persuasive arguments that keep people on the wheel. And the hope is that someday, you’ll be able to stop running and enjoy the fruits of all that hard work.

Unfortunately, more often than not, “someday” never comes. If your focus in your work and in your financial planning is just having enough money, you’ll never feel like you have enough. There’s always another dollar to chase, another way to economize so that you can save more.

But for what? Is having more and more money, in and of itself, something that you really value? Does having more make running on the wheel worth it?

You might think that this “never enough” mentality ends once a person retires. In fact, it just transitions into a new, related worry: “Am I going to run out of money?” Again, that “someday” gets pushed back in favor of more saving, more super-conservative living. You might not be working any more, but you’re still just chasing after money.

The wind in your sails.

At the end of the day, your money is not the shore we’re sailing for. It’s not the sea you’re sailing on. It’s not even the boat you’re steering.

Your money is the sail. It’s the tool you use to get where you want to go.

And the wind in that sail is your values.

Just like a good sailor learns how to maneuver the sails to catch the most wind, aligning what’s most important to you with your financial resources is the key to successful financial planning.

So instead of asking yourself if you have enough money, or if you will run out of money, ask yourself a better question:

Am I managing my money in a way that’s improving my life?

We don’t want you just to “have enough money.” We want you to live the best life possible with the money you have.

That starts with thinking about what’s really important to you. The people whom you love. The causes that are dear to your heart. The activities that keep you feeling fit and full of energy. The hobbies that put your unique skills to their highest uses. The opportunities for learning and self-discovery that enrich your understanding of the world and of yourself. The wisdom that you will pass down to your children and grandchildren so that they live their best possible lives as well.

We believe that aligning your financial plan with these values is every bit as important as analyzing your tax situation or managing your investments. Come in and see how our interactive tools can you help plan for your whole life and get more from your money than just more money.

For more resources to help you align your money with your goals, and increase your return on life visit our video library.

How Are You Feeling About Financial Markets?

How Are You Feeling About Financial Markets?

Heritage Insider Weekly November 12, 2018

Some votes are still being counted but investors appear to be happy with the outcome of mid-term elections. Major U.S. stock indices in the United States moved higher last week, and the American Association of Individual Investors (AAII) Sentiment Survey reported:
 
“Optimism among individual investors about the short-term direction of stock prices is above average for just the second time in nine weeks…Bullish sentiment, expectations that stock prices will rise over the next six months, rose 3.4 percentage points to 41.3 percent. This is a five-week high. The historical average is 38.5 percent.”
 
Before you get too excited about the rise in optimism, you should know pessimism also remains at historically high levels. According to AAII:
 
“Bearish sentiment, expectations that stock prices will fall over the next six months, fell 3.3 percentage points to 31.2 percent. The drop was not steep enough to prevent pessimism from remaining above its historical average of 30.5 percent for the eighth time in nine weeks.”
 
So, from a historic perspective, investors are both more bullish and more bearish than average. If Sir John Templeton was correct, the mixed emotions of investors could be good news for stock markets. Templeton reportedly said, “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”
 
While changes in sentiment are interesting market measurements, they shouldn’t be the only factor that influences investment decision-making. The most important gauge of an individual’s financial success is his or her progress toward achieving personal life goals – and goals change over time.
Let’s take a look at some performance figures…

Data as of 11/9/18
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor’s 500 (Domestic Stocks)
2.1%
4.0%
7.6%
10.2%
9.4%
11.7%
Dow Jones Global ex-U.S.
-0.3
-11.7
-9.4
3.2
0.3
4.7
10-year Treasury Note (Yield Only)
3.2
NA
2.3
2.3
2.8
3.8
Gold (per ounce)
-1.7
-6.6
-5.7
3.6
-1.1
4.9
Bloomberg Commodity Index
-1.2
-6.0
-5.2
-0.5
-7.7
-4.4
DJ Equity All REIT Total Return Index
3.5
2.3
1.2
8.2
9.6
13.9
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
is A Zeal of zebras a better investment than a blessing of unicorns? 
Collective nouns are the names we use to describe collections or significant numbers of people, animals, and other things. The Oxford English Dictionary offered a few examples:
 
  • A gaggle of geese
  • A crash of rhinoceros
  • A glaring of cats
  • A stack of librarians
  • A groove of DJs
 
In recent years, some investors have shown great interest in blessings of unicorns. ‘Unicorns’ are private, start-up companies that have grown at an accelerated pace and are valued at $1 billion.
 
In early 2018, estimates suggested there were approximately 135 unicorns in the United States. Will Gornall and Ilya A. Strebulaev took a closer look and found some unicorns were just gussied-up horses, though, according to research published in the Journal of Financial Economics.
 
The pair developed a financial model for valuing unicorn companies and reported, “After adjusting for these valuation-inflating terms, almost one-half (65 out of 135) of unicorns lose their unicorn status.”
 
Clearly, unicorn companies must be thoroughly researched. There is another opportunity Yifat Oron suggested deserves more attention from investors: zebra companies.  Oron’s article in Entrepreneur explained:
What is a unicorn company?
 
“Zebra companies are characterized by doing real business, not aiming to disrupt current markets, achieving profitability and demonstrating it for a while, and helping to solve a societal problem…zebra companies…are for-profit and for a cause. We think of these businesses as having a ‘double bottom line’ – they’re focused on alleviating social, environmental, or medical challenges while also tending to their own profitability.”
 
Including both types of companies in a portfolio seems like a reasonable approach.
 
If you were to choose a collective noun to describe investors, what would it be? An exuberance? A balance? An influence?
 
Weekly Focus – Think About It
 
“In his learnings under his brother Mahmoud, he had discovered that long human words rarely changed their meanings, but short words were slippery, changing without a pattern…Short human words were like trying to lift water with a knife.”
–Robert Heinlein, American science fiction writer
 
Have a great week.

Did You Inherit Your Beliefs About Money From Your Parents?

Did You Inherit Your Beliefs About Money From Your Parents?

Lou Desepoli, Heritage Financial Advisory Group

Parents know that children hear, see, and pick up on everything that is going on with the adults in their lives. And when you were a child, you were no different.

Our attitudes about money are formed at an early age, as we absorb how people around us deal with money. Some of these beliefs, such as a commitment to disciplined saving, are positive. Others, like skepticism about the stock market, can be more harmful than helpful as we try to build wealth in our own lives.

Answering these four key questions can help you look at your financial upbringing with a fresh perspective. When you’re done, think about which money beliefs you want to pass on to your own kids, and which might be preventing you from living the best life possible with the money you have.

  1. What was money like growing up?

Your childhood experiences of money are a composite of details both big and small.

You probably compared the comforts of your home to what you saw next door and drew some conclusions about how comfortable your family was.

Did your parents get a new car every couple years or drive around the same station wagon until it died? Did you take frequent vacations? What were holidays and birthdays like?

Watching mom and dad carefully balance their checkbooks or set next week’s grocery budget also might have made a strong impression. And at the more serious end of the spectrum, an unexpected job loss, debilitating medical condition, or death could have had a profound impact on your family’s finances.

  1. What was money like for your parents growing up?

Many baby boomers were raised by parents who had to tighten their belts during the Great Depression and World War II. The Greatest Generation probably impressed upon your parents the value of the hard work, the importance of saving, and perhaps some real apprehension when it comes to money. Your parents may have passed on these same values to you, or swung in the opposite direction and tried to make money as stress-free as possible.

How much do you know about your parents’ childhoods? If they’re still living, ask some questions that will fill in your family’s history a little more clearly. You might learn something surprising. And you might gain some insight into how their experiences of money are still affecting you.

 

  1. What specific lessons were you taught that you have continued?

People who grow up in working-class households often learn negative lessons about wealth. Their parents may view affluent people with suspicion or even resentment. Sometimes there are valid reasons for these views. In other cases, hard-working adults see greener grass on the other side of the fence. They underestimate how much hard work and discipline really go into wealth-building. Their kids learn to do the same.

On a more positive note, your parents also made decisions that taught you what was more important. Perhaps they sacrificed their own leisure and comforts so that you could attend a good private school. A parent might have earned a modest living as a teacher or working for a nonprofit that made your community better.

  1. What was the best thing you were taught about money?

As a child you probably rolled your eyes whenever your parents doled out maxims about money or started reminiscing about what money was like when they were growing up.

Now that you’re the one doing the earning, some of those lessons probably ring true. “Live on less than what you make” is hard to hear when it’s used to explain why you can’t have a new bike or take a big vacation. No child wants to sacrifice their weekends or summers working part time because their parents insist on it. But the lessons that were hard to swallow when we were young. These are the lessons that often create attitudes and habits that benefit us as adults.

The sum of all these memories, the positive and the negative, is a blueprint to your financial thinking. It’s also the schematic that we use to build your life-centered financial plan. Come in and share your blueprint with us so that together, we can lay a strong foundation for your family’s future.

For more information about this topic or any others, reach out to us by clicking here.

3 Ways to Know When You Are Ready to Retire

3 Ways to Know When You Are Ready to Retire

Mike Desepoli, Heritage

There’s a pretty good chance that your parents and grandparents retired just because they turned 65. Today’s retirement is a bit more complicated than that. While age is still an important factor, your ability to connect your financial resources to your lifestyle goals is what will truly determine if you’re ready to retire.

Here are three important markers to cross before you crack open your nest egg:

  1. You’re financially ready.

The most common question we field from our clients is, “How much do I need to retire?” While there’s no magic number to hit, a few key checkpoints are:

  • You have a budget. Many clients who are preparing to retire tell us they’ve never kept a budget before. Time to start! If you have any big plans for early in your retirement, like remodeling your home or a dream vacation, let us know so we can discuss front-loading your annual withdrawal rate.
  • Your debts are paid. No, you don’t necessarily need to pay off a fixed-rate mortgage before you retire. But try to reduce or eliminate credit card balances and any other loans that are charging you interest.
  • Your age, retirement accounts, and Social Security plan are all in-sync. If you’re planning on retiring early, be sure that your retirement accounts won’t charge you any early withdrawal penalties for which you’re not prepared. Also keep in mind that the earlier you take Social Security the smaller your payments will be. Can you afford to live without Social Security until age 70 to maximize your benefits?
  • You and your spouse have a health care plan. Medicare insures individuals, not families. If only the retiree is 65, the younger spouse will need to buy health care elsewhere.
  1. You’re emotionally ready.

We spend so much of our lives working that our jobs become a large part of our identities. Rediscovering who we are once we stop working can be a major retirement challenge. To prepare for this emotional transition:

  • Talk to your spouse ahead of time. Don’t wait until your last day of work to discuss how both of you feel about retirement. What do each of you imagine life will be like? What are the things you’re excited to do? What are you afraid of? What can each of you do to make this new phase of life as fulfilling as possible?
  • Make a list. What are the things you’re passionate about? Something you’ve always wished you knew more about? A skill you’d like to develop? A cause that’s important to you? An ambitious business idea that was too ambitious for your former employer?
  • Check that your estate plan is in order. It’s understandable that many people avoid this part of their retirement planning. But putting together a legacy that could impact your family and community for generations can have tremendous emotional benefits. The peace of mind that comes from knowing the people you care about are taken care of can empower you to worry a little less and enjoy your retirement more.
  1. You’re ready to do new things.

Ideally, the financial piece of this conversation should make you feel free enough to create a new retirement schedule based on the emotional piece. Plan your days around the people and passions that get you out of bed in the morning. Some ideas:

  • Work at something you love. Take a part-time job at a company that interests you. Turn that crazy idea you couldn’t sell to your old boss into your own business. Consult. Teach. Volunteer.
  • Keep learning. Brush up your high school French by enrolling in an online course. Learn some basic web design so you can showcase your photography portfolio or create an online store for your crafts. Sign up for cooking classes and get some new meals in your weekly rotation.
  • Get better at having fun. What’s the best way to lower your handicap or perfect your backhand? Take lessons from a pro. The second best? Organize weekly games with friends and family.
  • Travel. Planning out a big vacation can be a fun project for couples to do to together. And while you’re looking forward to that dream trip, take a few weekend jaunts out of town. Stay at the new bed and breakfast you keep hearing about. Visit your grandkids. Go on the road with a favorite sports team and enjoy the local flavor in a different city.
If you’re nearing retirement and struggling with these issues, working through the Return on Life tools with us might provide some clarity. Let’s discuss how we can help get you ready for the best retirement possible with the money you have.  

 

For more retirement resources visit the AARP website.

5 Next Steps When You Are Concerned About Aging Parents

5 Next Steps When You Are Concerned About Aging Parents

As your aging parents begin to settle into their final phase of life, their health, residence, and finances could become a factor in your retirement planning. This is especially true if you are the person your parents have tasked with settling their estates.

There’s no simple way to tackle all the logistical and emotional challenges associated with caring for an aging parent. But these five steps will help you get the help you’ll need to make sure your parent is safe, cared for, and financially secure.

  1. Call a family meeting.

No two families are the same, but in most cases, you’re going to want to gather together all siblings and close family members for an open and honest discussion. If your parent is dealing with a serious and potentially debilitating health issue, don’t sugar-coat the truth. Hiding the facts now will only lead to hurt feelings, resentment, and poor planning.

Depending on the parent’s condition, you might consider dividing up a caregiving or visitation schedule. Even pitching in on small day-to-day tasks like helping mom or dad buy groceries can be a big help.

If you’re contemplating a more serious decision, like assisted living, make sure you give everyone space to voice an opinion. Try to keep the conversation as positive and solution-focused as possible. Employing a mediator or family counselor to facilitate might be a good option if you’re concerned old family issues could boil over and prevent a solid resolution.

  1. Don’t try to parent.

Shifting from the role of adult child to caregiver is going to be a difficult transition for both you and your parent. Don’t try to do too much too soon. Seniors who feel like they’re being “babied” are prone to depression or dangerous outbursts of independence, like grabbing the car keys or refusing to take medication.

A better approach is to try to frame your caregiving as a way of being more involved in your parent’s current routine. Take a seat at dad’s weekly card game. Put the grandkids’ sports and performance events on the calendar and offer transportation. Bring an extra dish to a dinner party. Drive mom to the movies … and let a sibling know the house will be unoccupied for a few hours if there are any cleaning or hoarding issues that need attention.

  1. Gather the essentials.

If your parent doesn’t keep all important documents in one location, now is the time to collect, copy, and file things like:

  • Identification (driver’s license, passport, birth certificate, marriage certificate, etc.)
  • Bank records
  • Home deeds and vehicle titles
  • Insurance records
  • Investment and retirement account records
  • Wills and trusts
  • Power of attorney
  • End of life directives
  • Login information for important online accounts (banking, subscriptions, social media)

There may be other documents that are unique to your parent’s living or financial situation. We can help you make a comprehensive list.

  1. Tag along.

Start attending doctor’s appointments. Don’t be afraid to ask questions that will help you familiarize yourself with your parent’s medical condition and aid with any at-home care like prescription drugs.

Also ask your parent to introduce you to his or her financial advisor and attorney. Make sure the relevant professionals have all important information about changes to your parent’s health, mental capacity, or living situation.

  1. Plan for the next steps.

At some point, your aging parent may no longer be self-sufficient. The earlier that you and your close family members decide upon an action plan, the better. Do you or anyone in your family have the room, the time, and the means to take in your parent? How can non-caregiving siblings or other family members chip in on associated costs of living?

In many cases an assisted living facility is a more realistic option. But be aware that your parent’s Medicare plan probably will not cover those costs. If your parent does not have retirement funds earmarked for end-of-life care, you and your close family members may need to hold another meeting to discuss how to pay for a facility.

None of these steps are easy, and none of the associated options your family settles on will be perfect. The sooner you loop us in on how caring for an aging parent might affect your financial picture, the sooner we can get to work on the money side so that you can concentrate on giving your family the love and support it needs during this difficult time.

4 Things to consider Before Financially Bailing Out Your Children

4 Things to Consider Before Financially Bailing Out Your Adult Children

Mike Desepoli, Heritage Financial Advisory Group

According to a recent study by TD Ameritrade, 25% of baby boomers are supporting their family members financially (1). Support to adult children averages out to $10,000 per year. That’s $10,000 that boomers aren’t saving, contributing to retirement accounts, or investing.

Can your retirement afford that kind of generosity?

If you fall short of your retirement goals, is the adult you’re bailing out going to bail you out during your golden years?

Before you write your struggling young adult another big check, ask yourself these four key questions:

  1. What, specifically, is this money for?

The key word here is SPECIFICALLY.

Many parents tend to err on the side of protecting their child’s feelings when weighing financial support. We know asking for money can be embarrassing, and we don’t want to deepen that embarrassment. Or we’re worried that if we ask too many questions the child will become frustrated and hide serious problems from us going forward.

These are understandable concerns. But it’s also important that you understand whether your child needs support because of something beyond his or her control (a car accident, serious health issues, unexpected job loss) or because they’re struggling with basic adult responsibilities. If your child is making poor budgeting decisions or settling for underemployment, you may be throwing good money after bad.

Be tactful, but get to the root problem before you decide if your money is the best solution.

  1. What is the real cost to me?

Many parents are already helping their adult children more than they realize.

For example, you might not think much of letting your adult children stay on the family cell phone plan or piggyback on an HBO subscription. After all, it’s only twenty bucks a month, right?

But how long have you been giving your child that monthly free pass? Years? You can also set time limits. For example, tell your child they can remain on the family cell phone plan until age 25 or until they get married, whichever comes first.

 

Are you helping with larger monthly expenses, like student loan or car payments? When will it finally be time to pull the plug?

Our advice: get it all down on paper. Make a spreadsheet that accounts for the financial support you’re already giving your child, large and small. Seeing how even small expenses accumulate over time will be eye-opening for both of you and help inform a good decision.

  1. What are the terms of the bailout?

This is another area that parents tend to tiptoe around because they’re afraid of insulting their children. But do you know of any bank that’s going to loan your kids money indefinitely, charge no interest, and ask for no repayment? Then why should your money be subject to such lousy terms?

Your children have to understand that your generosity is not open-ended, especially as you near retirement age. You’ve probably made many sacrifices for them already. You should not sacrifice your financial security or the nest egg that is meant to support you in retirement.

If your children want you to “be the bank,” then you have every right to act like one. Set clear terms in writing, including a repayment schedule. In more serious cases, you might want to bring us a copy of this agreement so that we can include it in your estate plan.

  1. How else can I help?

It’s very likely that your child spent 16 or more years in school without learning a single thing about managing money. Financial literacy just isn’t taught in schools. This knowledge gap could be a big reason your young adult is struggling.

A BMO Wealth Institute survey found that two-third of parents give money to adult children when a sudden need arises (2). Does your child need money suddenly because he or she doesn’t know how to budget? Help find that balance between covering current expenses and contributing to savings and investment accounts.

Housing and transportation expenses can be a shock to recent college grads. You could help your child negotiate a car lease. You might help a child who’s already chasing after the Joneses by counselling against a rash home purchase that will stretch his or her finances thin.

Introducing your underemployed child to some of your professional connections might lead to a significant career upgrade.

One key connection you should be sure to tap: your fiduciary advisor! We’re always happy to help our clients’ adult children get on their feet. We consider this a service to our clients because we know that the less you’re worried about supporting your children, the more secure your own retirement goals will be.

 

Sources
  1. https://s1.q4cdn.com/959385532/files/doc_downloads/research/TDA-Financial-Support-Study-2015.pdf
  2. https://wealth.bmoharris.com/media/resource_pdf/bmowi-bank-of-mom-and-dad.pdf

How to Have More Fun and Meaning When You Retire

How to Have More Fun and Meaning After You Retire

Lou Desepoli, Heritage Financial Advisory Group

A blank calendar filled with nothing but free time can be every bit as stressful as a packed work week.

That’s the surprising fact that many people who retire confront after a few days of hitting the snooze button and puttering around the house. This is usually when the reality of retirement sets in. This is your life now. What are you going to do with it?

Whatever you want!

The only thing better than sleeping in is jumping out of bed early because you’re energized and excited for the day ahead. This is the kind of active and fulfilling retirement that we love to help our clients prepare for.

Here are some ideas for creating a new retirement schedule that will keep you growing, learning, experiencing new things, and making meaningful connections with your community.

  1. Travel.

Taking all those trips you couldn’t squeeze in around work meetings and kids’ baseball tournaments tops many retirements wish lists. And with good reason. After all that hard work, prudent planning, and disciplined saving, you deserve to treat yourself, do things you never had time for, see places you’ve always wanted to see.

Why not try to be your own travel agent? Planning a few big trips scattered throughout the year can be a fun activity for you and your spouse to do together. And in between those big destination vacations like a river cruise in Europe, you can sprinkle in some long weekends visiting the grandkids, and a few separate getaways to give each of you space to pursue your personal passions.

  1. Work or volunteer part time.

No, “working in retirement” is not an oxymoron. More and more retirees who can afford to stop working are taking part-time jobs and volunteer positions. This can give your week some welcome structure and provide an outlet for things you’re passionate about.

That non-for-profit job you couldn’t afford when you were raising kids and paying a mortgage? Take it. Do some good in your community and make a little spending cash on the side. Put your cultural expertise to work as a docent for an art gallery or museum. Volunteer at a church or charitable organization that’s close to your heart.

  1. Upgrade your living situation.

Whether you’re handy and enjoy doing the work or just like picking out new colors, patterns, and fixtures, take care of all those lingering household projects. Your comfort is important, especially as you age. Don’t let minor inconveniences like leaky faucets and spotty heating turn into major problems. Get rid of that lumpy mattress and hard couch you’ve been torturing yourself with for a decade. Map out the deck and pool you’ve always wanted and turn your backyard into a central hangout for your family and friends.

Of course, that’s assuming you want to “retire in place” at your current residence. A permanent change of scenery can be invigorating as you enter this new phase in your life. Just make sure you talk to us if you see a new beachfront condo in your future. We’ll make sure to incorporate the move and all the necessary tax, health care, and cost of living adjustments into your financial plan.

  1. Get really good at something you love doing.

Been a frustrated weekend golfer your whole life? Sign up for lessons and get that handicap down for good. What better time than when you retire? Or better yet, set up a weekly tee time with a group of retired friends. No more rushing through meals on your way to and from work and school, so let your inner foodie have the run of the kitchen. Dust off your college French lessons before that dream trip to Paris with an online class. Clear out that back bedroom no one uses any more and make a study. Paint the pictures you’ve always wanted to paint. Finish the novel hiding in the bottom of your desk drawer.

The possibilities for an exciting and fulfilling life in retirement are bound only by your imagination and the financial resources you have available to you. Let us help you take care of the money part so you’re free to focus on the fun.

For more retirement resources check out our YouTube Channel

Let’s Talk Turkey!

Let’s Talk Turkey!

 

So, how did Turkey, a country that represents just about 1.4 percent of the world’s economy spark a global selloff?

 

Turkey was once a rising star. The country’s Prime Minister Recep Tayyip Erdogan took office in 2003 and his “conservative, pro-business policies helped pull the country back from an economic crisis,” reported Financial Times.

 

As Turkey’s economy strengthened, investors saw opportunity. Investments from outside the country averaged about $13 billion a year, according to World Bank figures cited by Financial Times, although investment slowed after terror attacks in 2015.

 

Bloomberg reported Prime Minister Erdogan has become more authoritarian since being re-elected in 2018, giving himself power to name the head of Turkey’s central bank. Financial Times reported the Prime Minister’s “…unorthodox views on interest rates…has proved disruptive for monetary policy, leaving…Turkey’s central bank, struggling to contain inflation that is running at close to 16 percent.”

 

Lack of central bank autonomy concerned investors. The Turkish lira began to weaken against the U.S. dollar, making it costly for businesses to repay dollar-denominated debt.

 

Politics have factored into the situation, as well. During 2018, negotiations were underway to secure the release of an American pastor who was arrested on “farcical terrorism charges,” reported The Economist. However, talks collapsed early in August. Asset freezes and sanctions followed, along with promises of additional tariffs on Turkish goods imported by the United States.

 

The subsequent steep drop in the value of Turkish lira sparked concerns that rippled through global markets. Financial Times reported:

 

“Turkey’s deepening crisis punished emerging market currencies and sparked a global pullback from riskier assets on Friday…The S&P 500 fell 0.7 percent in New York on Friday. Treasury yields also moved lower, with the 10-year dipping below 2.9 percent for the first time this month, as investors sought safe assets…Investors’ shift from risky assets knocked equities across Europe, with Germany’s Dax, France’s CAC 40 and Spain’s Ibex all about 2 percent weaker.”

 

For quite some time, investors have appeared immune to geopolitical risks. Perhaps that is beginning to change.

 

 

Data as of 8/10/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.3% 6.0% 16.2% 10.4% 10.9% 8.1%
Dow Jones Global ex-U.S. -1.5 -5.5 1.7 2.9 2.6 1.1
10-year Treasury Note (Yield Only) 2.9 NA 2.2 2.2 2.6 4.0
Gold (per ounce) -0.2 -6.3 -5.5 3.5 -2.0 3.6
Bloomberg Commodity Index -0.8 -4.5 0.8 -3.1 -7.9 -7.7
DJ Equity All REIT Total Return Index -1.5 1.7 5.8 7.7 9.2 7.3

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

 

 

3 things to consider Before claiming social security benefits: timing, spousal benefits, and work status.

Most Americans understand they can choose when to begin receiving Social Security benefits. The choices are fairly straightforward:

 

  • Early (age 62 to full retirement age). People who decide to collect benefits early typically receive a smaller monthly benefit than they would if they waited until full retirement age. The reduction in monthly income may be as large as 30 percent. However, they receive benefits for a longer period of time.

 

  • Normal (full retirement age). An American’s full retirement age is determined by his or her date of birth. For someone born in 1960 or later, full retirement age is 67 years. The amount of income a person receives at normal retirement age is determined by the amount earned during his or her working years.

 

  • Delayed (after full retirement age to age 70). By delaying the start of Social Security benefits, a person can increase his or her monthly benefit by accruing delayed retirement credits. For Americans born in 1943 and after, credit accrues at a rate of 8 percent each year.

 

While it’s important to understand timing options for Social Security benefits, choosing when to take benefits may not be the most important decision you make, especially if you’re married.

 

There are several different claiming strategies that may help married couples optimize their benefits and the benefits available for children who are minors or have special needs. These options should be carefully considered before filing for benefits.

 

Your filing decision may also be affected by your work status and income. If you file early while still working, and your earnings exceed established limits, then a portion of your benefit may be withheld. In addition, your income will help determine whether your Social Security benefit is taxable.

 

If you would like to discuss your options for claiming Social Security benefits, give us a call.

 

Weekly Focus – Think About It

 

“Take time for all things: great haste makes great waste.”

–Benjamin Franklin, Founding Father

What Did You Learn Today?

What Did You Learn Today?

“In a world of change, the learners shall inherit the earth, while the learned shall find themselves perfectly suited for a world that no longer exists.”
― Eric Hoffer

It’s never been easier for adults to continue to learn after completing their formal education. Online universities, TED talks, “master classes,” podcasts, and even curated YouTube playlists put world-class professionals, teachers, and thinkers literally at our fingertips.

Are you taking advantage?

One common attribute of successful, happy people is that they are intensely curious. They never feel like the world has passed them by because they have made learning and self-improvement a lifelong process. In fact, Bill Gates places such a high value on continuous learning that he schedules annual “Think Weeks” where he holes himself up in a private study with books, magazines, and scientific papers.

Whether you want to stay ahead of the curve or just cultivate a curious mind, daily learning can have some major personal and professional benefits.

Upgrade your job.

Technology, automation, and the global marketplace have disrupted many jobs and career paths. Learning a new skill is a great way to “future-proof” yourself or even reposition yourself for a new job that you’ll find more fulfilling.

If you have an interest in tech, consider learning how to “code” by studying a programming language. If you’re a pen-and-paper artist, translate those skills to the digital world by learning website or graphic design.

Or, if you want to make yourself a little more global, why not learn a new language? Is your company preparing to expand into Europe or China? Do you have a large customer base that speaks Spanish? Learning the language of your business will prepare you for where that business is travelling next.

Think outside the office.

Learning can make life more exciting outside of the office as well. When we challenge ourselves to learn new things, we step outside of our comfort zones. We bring ourselves in contact with new cultures, new ideas, and new experiences.

French lessons might be your passport to a month vacationing in Paris. Signing up for a cooking class could improve your family’s health, or lead you to farmer’s markets that strengthen your connection to your community. Golf lessons could improve your enjoyment of the game and turn you into a better first coach for your young children.

Of course, learning doesn’t just mean signing up for formal classes. We spend so much of our lives on social media these days that it bears repeating: you can do a whole lot more with your phone and PC than get sucked into the latest tweetstorm. When was the last time you closed that Facebook app and opened up an ebook reader or audiobook player? You could also make your morning commute or exercises more stimulating if you cue up a podcast for some on-the-go learning.

Get ready for the long run.

One of the ways that your financial planning experience will be very different from your parents’ or grandparents’ is how we will account for your plan’s longevity. People today are healthier, living longer, and staying active later in life. In fact, Andrew Scott, Professor of Economics at London Business School and a fellow of All Souls, Oxford University, and the Center for Economic Policy Research, believes that hundred-year lifespans will soon become much more normal.

A commitment to learning and self-improvement will create positive attitudes and habits that will serve you well as you near retirement and prepare to enjoy your golden years. According to Professor Scott, “in a hundred-year life, leisure time will be used not just for recreation, but also, if you’ll excuse the pun, re-creation. You’re going to have to use leisure time not just as a consumption activity by watching Netflix, but as an investment activity. Using your leisure time to invest in yourself and not just rest we think will be crucial to deal with these changes.”

 

So, why not start making daily learning a part of your routine today?

Make a list of two or three things you’ve always wanted to know more about, or skills you wish you had, or talents you’d like to develop. If any of your learning goals are big enough that they might have an impact on your financial planning, we’d love for you to come in and tell us about them.

for more info on this topic and others, visit us at Heritage Financial Advisory Group

A Simple Plan to Achieve More and Feel Good About It

A Simple Plan to Achieve More in Life and Feel Good About the Results

Mike Desepoli, Heritage

We tend to overestimate what we can accomplish in the short-term and underestimate what we can accomplish in the long-term. The frustration that results is one big reason why so many New Year’s resolutions die before Spring.

But if you use these key strategies that are supported by deeply-held values – and science!  –  you’ll set better goals, achieve them, and feel better about yourself while doing so.

Know your values.

Knowing your values can provide real clarity on what you want to achieve in your life.

So ask yourself, what’s important to you? What makes you excited to get up in the morning? What are the passions and interests that fill your time when you’re not working? Who are the people you do those things with?

Another way to explore your values is to try new things. For example, volunteering at your local church or community center might reveal a passion for teaching or philanthropy that you never knew you had. These active experiments can become even more important as you age and start thinking about how you’ll stay happy and engaged in retirement.

Align your goals with your values.

Behavioral scientists have found that achieving goals is rarely a matter of ability or knowledge. For example, a person who wants to lose weight knows that eating ice cream with hot fudge five nights a week is not compatible with weight loss. Yet, the reason they keep downing that ice cream is often due to a lack of motivation. They might feel the immediate pleasure from the ice cream outweighs (no pun intended) the longer-term result of no weight loss, or worse, weight gain.

The more important a goal is to us, the more motivated we are to achieve it. Asking “Why?” can help you align your goals with your values and increase that motivational component:

  • Why should you stop eating ice cream five nights a week? Because I want to be healthier.
  • Why do you want to be healthier? So that I can live a longer and more active life.
  • Why do you want to live longer and be more active? So that I can do more things with my children and grandchildren.

Now we’ve identified core values – health and family – that are tied to the goal. These values will make the goal more important, and more likely to be reached.

Develop an action plan.

Asking “Why?” helps us move our goal-setting to a higher, value-driven space.

Asking “How?” helps us drill down into specific actions we can take to achieve those goals.

“I want to lose weight” is the sort of goal many people set and then abandon. That’s because it’s too unspecific. You can’t just “lose weight” every day until you hit your desired number.

So ask yourself, “How am I going to lose weight?” An answer like, “I’m going to exercise more” is closer, but still not actionable enough.

So how are you going to exercise more? Take a bike ride through your neighborhood every morning? Jog for 30 minutes after work three days every week?

Those are small but solid steps that you can use to develop an action plan. You might even go a little further and join a gym, start a neighborhood walk group, or hire a coach to add an extra layer of accountability and keep you on track. And yes, cut out the ice cream and hot fudge!

Measuring is Motivating.

Whatever goal you set, try to keep score. It could be as simple as pulling out a piece of blank paper and putting a checkmark on it for each day you don’t eat ice cream. We find that the act of keeping score creates its own momentum and can be like a “pat on the back” for a job well done.

Be resilient.

Even a perfectly-set, highly-motivated goal will be challenging. Some lazy Saturday you’ll snooze past your workout. You’ll cheat on your diet. An unexpected home repair might throw off your budgeting goals for the month. But that’s ok! We’re all human. Roll with it that day but then get right back to your plan.

All goals and personal improvements require effort. The grit we need to get over those inevitable humps is its own kind of skill that you can cultivate. Try to push yourself above and beyond your smaller targets. Welcome and accept feedback and criticism that can make you perform better. Prepare yourself to do better tomorrow when your alarm goes off.

And most importantly, stay positive. If your goals truly are aligned with your values, then working towards them shouldn’t feel like punishment. When you experience setbacks, try to embrace them as learning opportunities and adjust your action plan accordingly. And here’s an important piece of advice–when you hit small milestones on your way to big goals, treat yourself. We can all use a little positive reinforcement.

We’re here to help you.

What you aspire to achieve may require a financial commitment. Please contact us and we can discuss your particular situation and see how we can help you get on a faster path to achieving your life’s aspirations.

Sources

https://www.belayadvisor.com/behavior/

https://99u.adobe.com/articles/55219/true-grit-how-to-build-up-your-resilience

Are You Financially and Emotionally Prepared for Life’s Big Transitions?

Are You Financially and Emotionally Prepared for Life’s Big Transitions?

Mike Desepoli, Heritage

Financial planning is more than just a series of savings and investments you lock away and forget about. Your money doesn’t exist in a vacuum. Your financial needs are going to fluctuate in response to the transitions that we all go through as we work, raise our families, and look ahead to retirement.

Managing these transitions is one of the keys to maximizing your finances and to achieving a greater Return on Life™ (ROL).

It’s Better to Prepare Than Repair

When it comes to your financial future, it’s easier to prepare for what’s ahead than it is to repair mistakes. With that in mind, we have a tool called The $Lifelineä. It’s designed to help you prepare for life’s transitions by asking you to anticipate what’s coming up and the age at which you expect the transition to happen.

You can then plot the applicable transitions on your $Lifeline, and use a color-coded system to rate the transition based on whether it is a High, Medium, or Low priority. If you’re married, you and your spouse can plot both shared transitions and transitions that are unique to each of you on the same $Lifeline for a complete picture of all the milestones that will affect your household, and your finances. Each transition also includes links to additional resources that you can consult for more information.

Let’s take a look at the six $Lifeline categories, and a few of the important transitions we can help you map out and prepare for:

Family
  • Expecting a child
  • Special family event
  • Assistance to a family member
  • Child going to college
  • Child getting married
  • Empty nest
Health
  • Worried about an aging parent
  • Concern about the health of child
  • Possible concern about the health of spouse
  • Family member with disability or illness
  • Recent death of a family member
  • Create end of life medical directive

 

Work
  • Contemplating career change
  • Job re-structuring
  • Expand business
  • Start a new business
  • Acquire / purchase a business
  • New job training / education
Retirement
  • Downshift worklife
  • Full retirement
  • Changing residence
  • Start receiving Social Security income
  • Eligible for Medicare.
  • Start receiving retirement distributions
Financial
  • Refinancing mortgage
  • Reconsidering investment philosophy
  • Significant investment gain
  • Significant investment loss
  • Considering investment opportunity
  • Receiving inheritance
Giving
  • Stipend to family member
  • Gift to children / grandchildren
  • Develop / review estate plan
  • Create a foundation
  • Create or fund a scholarship
  • Fund a cause or event

 

Transitions Change Over Time

Once we’ve plotted your anticipated life transitions on your $Lifeline, we can start discussing the transitions that are most important to you from an immediate planning standpoint. Maybe you need to understand the financial implications of taking care of an aging parent. Perhaps it’s figuring out how to pay for your kids’ education. Or you may want to know the best time to start receiving pension payments.

Over time, as new transitions arise and old ones get completed, we can add, remove, and reprioritize transitions as necessary.

The easiest way to throw off your financial plan is to make a rash, emotional decision in the middle of a difficult moment. The $Lifeline, and our Life-Centered Planning process, will help you avoid reacting – or overreacting – to the ebbs and flows of your life by putting you into a more proactive mindset about your financial future.

You’ll be less likely to take on a risky second mortgage to pay for your son’s freshman year of college and your daughter’s wedding if you plan for those events in advance—something the $Lifeline helps you visualize.

As you prepare to go through the $Lifeline exercise, take a look at the categories and transitions listed above. If you’re married, talk to your spouse about them. Write out a list of transitions that you know you’ll want to plot on your $Lifeline. When we meet, we’ll fire up the tool and create your personalized $Lifeline so you can start preparing for life’s big transitions.

 

Are You Living Your Life On Purpose?

Are You Living Your Life On Purpose?

Lou Desepoli, Heritage

Why, day in and day out, do you do the things that you do?

Because you have to? Is it because you want to? Or is it because you’ve had the same routine for years and you’re used to it?

If you feel like your life is something that just happens to you, it’s time to reassess how you’re spending your time. Financial security, stability, and creature comforts are all important. But feeling that your life has purpose will become more and more critical to your emotional and physical well-being as you age — especially when you finally retire.

A healthy sense of purpose.

Research into the area of human well-being draws a distinction between happiness (experiencing pleasure and avoiding pain) and the feelings of meaning and self-worth that we derive from our lives (1).

Too often, we focus on the former and neglect the latter. This is why the sheen wears off so quickly from a big-ticket purchase. Buying a new car or big-screen TV gives us a quick hit of pleasure. But sooner rather than later, new things become just more things that we’ve accumulated. Once that initial happiness evaporates, we find there’s no additional layer – no purpose – to improve our well-being.

Researchers have also found that people who feel like their lives have purpose live longer and show decreased risk of cardiovascular problems (2). And as you age and prepare for retirement, living with purpose helps to limit your risk of cognitive problems, such as Alzheimer’s (3).

The purpose of work and family.

Most of us tie purpose to the things that we spend the majority of our time doing: working and raising our families. Again, it’s important to draw a distinction between simple happiness and purpose.

A doctor who has to deal with ill people and mortality might not consider her job “happy” all the time. But helping people gives her that critical sense of purpose that rounds out her feelings of well-being.

Taking care of children will, at times, make even the most patient parents want to pull their own hair out. But feelings of love, connection, and responsibility make both happy family vacations and frustrating afternoons in timeout purposeful.

If you feel like your life is lacking purpose, start by looking for misalignment in these two areas. Is your job “just a job” that pays the bills? How could you pivot to a career that uses your unique gifts and skills to create purpose? Or are you working so hard that you’re missing key family events, which are also critical to your sense of purpose? Are there ways to improve your work-life balance?

It’s never too late to start living.

Many people believe that living and giving generously with their time, talents, and/or finances is a luxury they can’t afford, especially once children, mortgage payments, and college tuition enter the picture. However, research indicates that senior citizens frequently cite “dying with their music still in them” as one of the biggest areas of regret when they look back on their lives, meaning, chances they didn’t take, ideas they never pursued, or opportunities they watched pass by. It’s not money they’re regretting, it’s the sense of purpose they missed out on that would have improved their Return on Life.

Of course, not everybody can have that “perfect” job. But even in those situations, think of it not so much about the work you do, but “who you bring” to the work you do. Find ways to bring purpose to even the most mundane jobs and how that work is helping others.

And it’s never to late to find that purpose. Even seniors can discover new passions that will give their golden years purpose if they approach retirement with an active, enthusiastic mindset.

If you’re having trouble getting started, try asking yourself, “Why do I get out of bed in the morning?”

Is it to take care of your family? If so, then consider planning a family vacation for the summer. Coaching your child’s youth sports team. Turning dinner time into a group cooking activity. Or setting a regular monthly date night with your spouse.

If you find purpose in helping those in need, consider finding a volunteer position for a few hours a week.

Do you like to express yourself? Then perhaps start a blog or a digital photography website that you can work on in your free time. Turn that spare bedroom into a craft room.

And if you think your purpose is simply to make more money? Well, then maybe you need to start asking yourself better questions. Remember, money is a means, not an end.

We encourage you to come in and talk to us so that we can start a new dialogue about how your financial plan can help you get the best, most purposeful life possible with the money you have.

 

Sources:
  1. https://www.ncbi.nlm.nih.gov/pubmed/11148302
  2. https://www.ncbi.nlm.nih.gov/pubmed/26630073
  3. https://jamanetwork.com/journals/jamapsychiatry/fullarticle/210648

 

 

Debt: What’s Your Story and How Do You Feel About It?

Debt: What’s Your Story and How Do You Feel About It?

By Mike Desepoli, Heritage

In a recent study, half of Americans said their debt and expenses is equal to or greater than their income. 1 Revolving credit, particularly credit cards, is an increasingly significant part of the equation. According to the Federal Reserve Bank of New York’s Household Debt and Credit report data, Americans’ total credit card debt hit $905 billion in 2017 – an increase of 8% from the previous year. 2

The phrase “credit card debt” usually triggers red flags when we’re talking about long-term financial planning. And in fact, the average US household now carries $15,654 on their cards, and pays $904 annually in interest. 2 But debt, in and of itself, isn’t good or bad. Instead of making a value judgement about how you use debt, when working with clients we like to understand:

  • What is your debt story?
  • What are your attitudes about debt?
  • Why do you feel the way you do?
  • How are your debt levels affecting the Return on Life your money provides?

Having a deeper understanding of the above helps us do a better job positioning your money to work more effectively for you.

What’s the big picture?

Our current high debt levels reflect a previous generation of low interest rates, an active housing market, a robust credit market, and relative peace and prosperity. This meant more consumers with more plastic and more loans. Again, debt is not bad in and of itself, especially in a healthy economy. But from 2007-2009, many highly-leveraged people and companies were vulnerable to foreclosure and bankruptcy during the Great Recession.

People who were born between the Great Depression and World War II grew up in the daily realities of war and lean markets. Unsurprisingly, this group tends to avoid using credit cards when they can. Instead, they rely on the cash in their hands and the checkbooks they balance with pen and paper.

That credit-aversion seems to have skipped the Boomer generation, who, generally speaking, happily used credit cards and home-equity loans.

The current generation of young workers—Millennials—seem to be warier about carrying debt than their parents were.

Young people are entering the workforce at a time when household income is struggling to keep pace with the cost of living. They believe taking on debt would only widen that gap. In particular, the costs of medical care, housing, and food continue to grow faster than income. 2

Many underemployed Millennials are living at home into their late-20s, so they aren’t using credit cards to finance luxury items or buy first homes. Even for millennials who do find good jobs after college, many start their adult lives in the red because of student loans. As of September 2017, the average US household had $46,597 in student loan debt. 2

Millennials are less enthusiastic about investing in the markets. Growing up during the Great Recession shook their faith in the economy. Growing up in the shadow of 9/11 and terrorism, they’ve only known a world unsettled by global unrest.

Millennials are also a more conscientious consumer group than their parents were. They want to spend their time, and their money, on things that help to make the world a better place. They consider personal fiscal responsibility to be part of a greater good.

What’s your story?

While looking at big picture debt trends is useful for predicting where the economy is headed, your Life-Centered Plan is about you. Now would be a great time to take a minute to consider:

  • How do you feel about debt?
  • Why do you think that you feel the way you do?
  • Are you comfortable with your current level of debt?
  • Is your current level of debt causing any problems with one of your loved ones?
  • Do you pay off your credit card balances in full every month?
  • How do your attitudes about debt align or differ with those of your parents? Why do you think that is?

We encourage you to reach out to us and we can take a closer look at your financial situation and help you get on a more comfortable path. Together, we can create a financial plan that will improve your Return on Life.

 

Sources
  1. Half of Americans are spending their entire paycheck (or more) http://money.cnn.com/2017/06/27/pf/expenses/index.html
  2. Nerdwallet’s 2017 American Household Credit Card Debt Study https://www.nerdwallet.com/blog/average-credit-card-debt-household/

 

What To Do With Your 401k When Changing Jobs

What To Do With Your 401k When Changing Jobs

By Mike Desepoli, Heritage

Last year, millennials were nicknamed the ‘job-hopping generation’ after a Gallup report revealed that 6 in 10 millennials are open to new job opportunities.

According to this report, millennials have a reputation for job-hopping and are said to move freely from company to company, more so than any other generation.

That being said, I don’t think switching jobs is a trait unique to millennials only, even though they are said to job-hop three times more than other generations.

The job market is ever-changing and is not like it used to be. Fewer companies offer pensions and some entry-level jobs offer very little benefits or stagnant wages. Self-employment, temporary work, and side jobs have all become increasingly popular work options.

Also, there is less loyalty among employees who realize they can be laid off at any given time.

At the end of the day, if you come across a better job opportunity that you think you’ll be happier with and has better pay and benefits, you may feel tempted to switch jobs and there’s nothing wrong with that.

If you have a 401k however, you may be wondering what you can do with it when you do secure another job. You don’t want all the money you saved for retirement to go to waste, so here are a few options.

 

Keep the Money in Your Old 401k

Most companies will let you leave the money you saved for retirement in your 401k where it is. In other cases, there may be a balance requirement.

Employees who move on to another company may choose this option out of default especially if they have no idea what to do with their 401k. The major downside is that you won’t be able to contribute to your 401k anymore.  Also, you’ll have to keep track of more than one retirement account.

If you tend to switch jobs every couple of years, you could wind up with multiple 401k plans that you can’t contribute to which is why it’s best to consider some of these other options first.

 

Roll Over Your 401k to Your New Company’s 401k

If you had a good 401k plan with your old employer, you can easily roll it over to your new 401k. Check to see what the investment options are along with the fees with your new company. If you don’t like your current options as much as your old plan, consider rolling it over.

Most employers will accept a 401k rollover. As long as you have at least $5,000 in your account, it’s your legal right to do roll it over. If you have less than $5,000 in your account, your employer will have the option to cash you out of the plan.

If you’re going with this option, always ask for the rules to be clarified since you may have limitations since you’re no longer with the company. For example, you may be charged extra fees since you no longer work there.

Move Your 401k to an Individual Retirement Account (IRA)

This is another option you’ll have especially if you don’t like your new company’s 401k plan. IRAs and Roth IRAs are great options that typically have lower fees and allow you to have more control over your investment options. With an IRA, you will just have more control overall. You can choose low-fee investments and won’t be limited to name just your spouse as your beneficiary like with most 401k plans.

Keep in mind that there is a difference between a traditional IRA and a Roth IRA. With a traditional IRA, you contribute pre-tax dollars.  The money is not taxable until withdrawals begin. If you withdraw funds before then, you’ll most likely have to pay a penalty fee.

With a Roth IRA, your contributions are taxed when you make them so your earnings will be tax-free. Withdrawals are also tax free once you attain age 59 1/2.

There are also income limits to be eligible for an IRA. In 2017, you must earn less than $118,000 if you’re single and less than $186,000 if you’re married. The maximum contribution you’re allowed to make per year is $5,500 and $6,500 if you’re 50 or older.

Cash Out Your 401k

This isn’t the best option, but it is an option nonetheless. If you want or need the money in your 401k account to pay bills, meet other expenses you have, or even to reinvest another way, you can simply cash out what’s in your retirement account.

A major downside is that you will have to pay taxes on the money along with a penalty. If you cash out a smaller amount, what you receive will be even smaller. If you cash out a large amount, it won’t really be worth it due to your large tax bill.

You could also destroy your retirement nest egg in the process especially if you received a nice 401k company match.

Depending on how many times you switch jobs that provide you with a 401k account, you may need to make the decision of what to do with your old 401k more than once. To determine which option is best for you, determine your current and future needs. Always consider factors like fees along with your investment options.

I’m sure everyone wants to retire some day so it usually the better option to keep money from your 401k and roll it over or put it in an IRA.

Senate Tax Reform Highlights

Senate Tax Reform Highlights

by Kristi Desepoli, Heritage

Tax reform, a campaign promise as old as the walls of congress. This weekend, a 51-49 vote occurred on Saturday by the U.S. Senate to pass a tax reform worth about $1.4 trillion. Although the bill is not yet finalized, this brings many Americans much closer to a tax cut.

Here is how the latest tax reform legislation would affect you:

Deductions

The bill allows deductions of up to $10,000 in local property taxes, but does away with federal deductions for state and local income and sales taxes. As far as personal deductions, the bill nearly doubles the standard deduction level to $12,000 for individuals and $24,000 for couples; up from $6350 and $12,700 respectively.

Tax Brackets

The Senate bill keeps seven tax brackets, but reduces them to 10, 12, 22, 24, 32, 35 and 38.5 percent. Currently, the seven brackets are: 10, 15, 25, 28, 33, 35, and 39.6 percent.

Corporate Tax Rates

The Senate bill will cut the current rate of 35 percent to 20 percent, but it calls for a one-year delay in dropping the rate.

Tax Reform and 2017 Returns

The changes will not have any impact on your taxes for 2017.

President Trump and congressional Republicans have vowed to make tax reform law before the end of the year. If that is the case, most of the provisions would take effect on January 1st.

 

6 Steps to Get Out of Debt

6 Steps to Get Out of Debt

Unfortunately there are no classes in high school or college that teach you how to pay off a loan or credit card, but there are plenty of companies out there willing to lend you the money you need for your next big purchase. Knowing that a portion of your hard earned money will be going towards digging yourself out of a hole instead of wealth preservation can be discouraging; but that doesn’t mean you can’t cover up that hole and walk away debt free.

Getting out of debt requires a plan and commitment. Here are six simple strategies to help you pay off any kind of debt:

Figure out how much you owe

Gather your statements, and log onto those accounts to see how much you owe for each account. Make a list of your accounts, the balances, and the interest rates being charged.

Rank your debts in order of size or interest rate

Next, you need to decide the order you want to pay off your debts. One strategy is the “snowball method.” This is where you start with your smallest debt, and work your way up to the bigger ones. The idea is that as you are able to check accounts off of your list as being paid off, you gain both a confidence and mental boost to keep on going. Another strategy would be to tackle the most expensive debt first. Find the account with the highest interest rate, and pay down that debt. Once that is paid, move onto the next highest interest rate, and so on. Doing this will ultimately have you paying less over the life of your loans.

Know how much you’re spending

It is important to know how much money you have coming in vs. how much money you have going out. After you have a good idea of the amount left over every month, it will be much easier to determine the amount you can comfortably devote to paying down your debt.

Allot cash for minimum payments

Although earlier we established what debt we would like to pay down first, we can’t forget that the rest of the accounts have the minimum payments that need to be made each month. It is important to take these minimum payments into account before allocating extra funds to the first debt on your list to pay off.

Automate your payments

Regardless of if you’re making a minimum payment or throwing extra money toward the debt to get it paid off, it’s always a good idea to make your payments automatic. It’s as simple as a few clicks online or a quick phone call to set up. Not only will you be sure not to miss a payment, but it’s a little bit easier to part ways with your money when you don’t have to manually make the payment every month.

Reduce your regular expenses

Many times we don’t know just how much we’re spending on certain things until it’s all laid out in a budget. Setting a limit to the amount of money you allocate to different categories on a monthly basis is a good way to free up extra cash to put towards your debt. It’s always a good idea to check back each month and see how you can improve your spending habits, and make any changes to better suit your needs. If you would like additional help on budgeting, you can find resources here.

About the Author

Kristi Desepoli is an associate financial advisor at Heritage Financial Advisory Group. Heritage specializes in investment management and financial planning for business owners, executives, and doctors.